Cord-Cutting Alert: Pay-TV Business Declines for First Time During Q1

The U.S. pay-TV business keeps shrinking, albeit slowly — but for the first time ever, the sector dropped a net number of subscribers in the first three months of a year, during Q1 of 2015.

The industry is contracting at a 0.5% annual rate, with a net loss of 31,000 customers in Q1, according to MoffettNathanson analyst Craig Moffett. Traditional subscription television providers face an array of Internet competitors, ranging from Netflix and Hulu to YouTube and other video streaming sites, that are discouraging consumers from signing up for cable or satellite TV or prompting them to cancel service.

“Cord-cutting has finally accelerated,” Moffett wrote in a research note Monday. “It’s not too early to get worried.”

Q1 is typically a strong quarter for pay-TV operators, but it’s seasonally weak for household formation, Moffett noted: In the first quarter of 2015, occupied household net adds were down 407,000, according to the U.S. Census Bureau.

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