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Top US Pay-TV Providers Dump Record 1.53M Subs in Q2

Jeff Baumgartner
8/12/2019
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Pay-TV had a record Q2, but it wasn't one for service providers to be proud of.

Fueled by video cord-cutting and the end of deeply discounted service promotions, the largest US pay-TV providers, representing about 93% of the market, lost a record 1.53 million video subs in Q2 2019, according to an analysis from Leichtman Research Group (LRG).

Those steep losses compared to a net loss of about 420,000 pay-TV subs in the year-ago quarter, LRG said, noting the sharp losses are also entering play as some providers put more focus on gaining and retaining higher-end, more profitable subscribers.

Satellite TV took it particularly hard, with DirecTV and Dish Network combining to lose a whopping 855,000 subs in Q2. Over the past year, US satellite TV providers have lost about 3.75 million subs, much greater than the 1.59 million they lost over the previous 12-month period, LRG said.

The top seven US cable operators covered by LRG's study lost 455,000 video subs in Q2 2019, widened from a year-ago loss of 275,000 subs. LRG said the Q2 2019 losses were the greatest among US cable operators since Q2 2014.

The top US telco TV providers (Verizon Fios, AT&T U-verse and Frontier) dumped 100,000 video subs in the period, more than doubling their combined loss of 45,000 in the year-ago period.

Internet-delivered services from virtual MVPDs still aren't making up the difference. Sling TV and DirecTV Now (which is being rebranded as AT&T TV Now) actually lost 120,000 subs in Q2 (Sling TV gained 48,000 while DirecTV Now lost 168,000), versus a year-ago net gain of 385,000.

Granted, the virtual MVPD subscriber count is a bit of a black box since most of the other OTT-TV providers (YouTube TV, Hulu Live TV, fuboTV, Philo, PlayStation Vue and Vidgo) don't release sub numbers or do not release them on a regular quarterly basis. But they clearly are not keeping pace with the losses being absorbed by traditional pay-TV providers.

Based on the public numbers and estimates, LRG said the top US pay-TV providers have about 86.6 million subs -- 46.5 million for cable, 27.5 million for satellite TV, 8.8 million among top telco TV providers, and 3.8 million for the two publicly reporting virtual MVPDs.

Why this matters
Although Q2 is typically the roughest for pay-TV providers as students and snowbirds churn out, this one was particularly rough as consumers who were on temporary, steeply discounted plans fled the market.

The steep drop also reflects the fact that the pay-TV market continues to ride rocky seas with no end in sight as cost-conscious consumers opt for other ways to get their video fix, including free over-the-air TV, various subscription VoD services from the likes of Netflix and Amazon, and a growing mix of free, ad-supported OTT services (Xumo, Pluto TV and Tubi).

Meanwhile, some cable operators, such as Cable One, are now de-emphasizing pay-TV to instead focus on growing their higher-margin broadband businesses.

That trend is likewise causing other media companies, like WarnerMedia and The Walt Disney Co., to double down on new SVoD services that, they hope, will enable them to weather the transition in how consumers access and consume TV shows, movies and other video content.

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— Jeff Baumgartner, Senior Editor, Light Reading

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