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US Pay-TV’s Biggest-Ever Q2 Subscriber Drain: The Bad News Is Just Beginning

Roshan Dwivedi Published on : 17 August 2015
Cord Cutting

 

The numbers are in, and US cable, satellite and telco platforms collectively shed more than 625,000 video subscribers in the three months ended 30 June, falling to 101.4 million combined residential and commercial subs at mid-year.

According to the most recent report from SNL Kagan, US multichannel subscriptions saw its largest loss to date for Q2 (a traditionally weak quarter) — suggesting that growing threats of cord-cutting from video on demand service providers may not be too far off base.

The decline doesn’t exist in a vacuum — it follows a weak first quarter, and suggests the likelihood of a much larger decline for full-year 2015 than previously expected — in fact, it may be worse than anything that the industry saw between 2010 and 2014, during what could essentially be seen as a period of general malaise.

Cable’s basic-subscriber losses came in at 350,000, meaning that cable remains by far the greatest source of downward pressure on multichannel subscriptions.

That said, those results came in at their lowest level for Q2 since 2008, when the segment shed 211,000 basic video customers in the seasonally weak period. For perspective, from 2009 through 2014, second-quarter net losses averaged 609,000. But the fact remains that losses are continuing.

Satellite meanwhile saw an estimated 304,000 subscribers walk away, as DirecTV (133,000 losses) and DISH Network (151,000 losses) both reported record declines. The segment as a result retreated to just under 34 million subs.

“Speculation swirls around the decline in DISH Network subscribers coinciding with the promotion of the provider’s alternative Sling TV OTT offering, but the estimated loss from DISH was compounded by a decline at DIRECTV to drive the satellite total lower,” SNL Kagan said.

And finally, telcos increasingly appear to be trading subscriber gains for improved financials, the firm said. The combined multichannel video subscribers served by Verizon FiOS and AT&T U-verse were flat at 11.7 million at the end of the second quarter, with net adds of just 4,000. That’s in stark contrast to a year ago, when IPTV was the major growth engine for pay-TV.

Read the entire story here.

 

Written by: Roshan Dwivedi

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