U.S. Pay-TV Revenue to Drop $27B by 2023

Domestic pay-TV revenue is projected to decline $26 billion (26%) to $75 billion from a peak of $101.7 billion in 2015, according to new data from Digital TV Research.

Cable TV revenue will fall to $36.7 billion from a peak of $54.1 billion in 2010 at $54.1 billion. Cable will lose nearly 12 million subscribers, although most of the losses have already taken place.

“Satellite TV and [IPTV/telecom] are also losing subs and revenue,” Simon Murray, principal analyst at Digital TV Research, said in a statement. “Much of this is due to the operators shifting their subscribers to online platforms. However, growth from virtual MVPDs is not expected to make up completely for the subscriber and revenue shortfalls from traditional pay TV.”

The report suggests telecom sub losses are mainly due to AT&T encouraging U-Verse subs to convert to DirecTV. This is the reverse of what has happened in most other countries. Telecom revenue spiked in 2015 at $9.6 billion and will fall to $4.7 billion in 2023. The number of telecom subs topped 12 million in 2014, declining to 6.2 million in 2023.

Satellite TV revenue will decline (16%) from $39.7 billion in 2017 to $33.6 billion in 2023. Satellite TV subs will drop by 4 million from the end of 2017 to 2023 – down 3 million in 2017 alone. Dish is pushing its Sling TV platform, with DirecTV Now also making an impact.

The number of domestic traditional pay TV subs will fall from 100.3 million in 2012 to 80.3 million in 2023. Pay TV penetration will fall from 87.6% of TV households in apex year 2013 to 66.7% in 2023.

Although Canada is losing pay TV subs, its problems are not as severe as the United States. Pay TV penetration reached a highpoint in 2013 at 85.1%. The level will fall to 74.8% by 2023. However, the number of pay TV subs will be 11.2 million by 2023 – about the same as 2017. Pay TV revenue will fall from a peak of $6.8 billion in 2015 to $6 billion by 2023.

Pay-TV Operators Lost Nearly 1.5 Million Subs in 2017

Domestic pay-TV representing about 95% of the market lost about 1.49 million net video subscribers in 2017, compared to a pro forma loss of about 760,000 subscribers in 2016, according to new data from Leichtman Research Group. Traditional pay-TV services (not including Internet-delivered) lost about 3 million subs in 2017, compared to a loss of about 1.9 million subs in 2016.

The pay-TV providers account for 92.2 million subscribers — with the top six cable companies having about 48.1 million video subs, satellite TV services 31.5 million subscribers, telecoms 9.2 million subs, and online TV platforms with 3.4 million subscribers.

Leichtman said the top six cable companies lost about 660,000 video subs compared to a loss of 275,000 subs in 2016.

In 2017, the top cable providers cumulatively lost 1.4% of video subscribers — compared to a loss of 0.6% in 2016. Satellite TV services lost about 1.55 million subs in 2017 — compared to a loss of about 40,000 subs in 2016. DirecTV lost 554,000 subs compared to a gain of 1.22 million subs in 2016.

In 2017, DBS services cumulatively lost 4.7% of video subscribers — compared to a loss 0.1% in 2016

The top telephone providers lost about 885,000 video subscribers in 2017 — compared to a loss of about 1.59 million subs. AT&T U-verse lost 624,000 subs in 2017, compared to a loss of 1.35 million subs.

In 2017, the top Telcos cumulatively lost 8.7% of video subs, compared to a loss of 13.6% in 2016. The top (publicly reporting) Internet-delivered services added about 1.6 million subs in 2017, compared to 1.14 million net adds in 2016.

Subscribers to the top Internet-delivered services increased by 90% in 2017.

“Satellite TV services had more combined net losses in 2017 than in any previous year, yet these losses were offset by gains from their Internet-delivered flanker brands, such as DirecTV Now and Sling TV,” analyst Bruce Leichtman said in a statement. “Overall, the top pay-TV services lost 1.6% of subscribers in 2017 compared to a loss of 0.8% in 2016.”

 

Pay-TV Providers Subscribers at
End of 4Q 2017
Net Adds in
2017
Cable Companies
Comcast 22,357,000 (151,000)
Charter 16,997,000 (239,000)
Altice 3,405,500 (129,000)
Mediacom 821,000 (14,000)
Cable ONE* 283,001 (37,245)
Other major private company** 4,200,000 (90,000)
Total Top Cable 48,063,501 (660,245)
Satellite Services (DBS)
DIRECTV 20,458,000 (554,000)
DISH TV^ 11,030,000 (995,000)
Total DBS 31,488,000 (1,549,000)
Phone Companies
Verizon FiOS 4,619,000 (75,000)
AT&T U-verse 3,657,000 (624,000)
Frontier 961,000 (184,000)
Total Top Phone 9,237,000 (883,000)
Internet-Delivered
Sling TV^^ 2,212,000 711,000
DIRECTV NOW 1,155,000 888,000
Total Top Internet-Delivered 3,367,000 1,599,000
Total Top Providers 92,155,501 (1,493,245)