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  • Skinny Bundle Gains Help Offset Steep Q2 Pay-TV Video Losses

    The biggest U.S. pay-TV operators lost approximately 655K video subscribers in Q2 ’17, compared to a loss of 715K subscribers in Q2 ’16, according to Leichtman Research Group.

    But the Q2 ’17 loss would rise to around 895K if not for the approximately 235K subscribers added by skinny bundles Sling TV and DirecTV Now, which helped AT&T’s and Dish Network’s results. The 895K is worse than the 760K video subscribers lost in Q2 ’16 after backing out the approximately 45K skinny bundle adds in that quarter. The second quarter is traditionally weak for the industry with college students on the move.

    As has been typical for many quarters, the major cable TV providers fared better than both satellite and telcos. The top 6 cable TV providers lost 190K video subscribers in Q2 ’17, better than the 225K lost in Q2 ’16. Contributing to the Q2 ’17 slide was Comcast, which after improving its Q2 video subscriber performance successively over the past several years, reversed course and lost 34K video subs in Q2 ’17.

    The 2 main satellite providers notched their worst Q2 ever, jointly losing 437K video subscribers before the benefit of their skinny bundle subscribers. DirecTV lost 156K subs and Dish lost 281K subs. Satellite losses are being accelerated by corporate strategies favoring skinny bundles and reducing new satellite subscriber promotions.

    As I wrote recently, AT&T in particular has begun using its DirecTV Now skinny bundle as discounted bait to lure and retain wireless subscribers. In Q2 DirecTV Now gained 152K subscribers and Sling TV gained around 80K-90K.

    The telcos together lost 268K video subs in Q2 ’17, an improvement compared to a loss of 550K in Q2 ’16. In addition to de-emphasizing DirecTV satellite subscribers, AT&T is also scaling back its U-verse subscribers in favor of DirecTV Now in a discounted bundle. Verizon’s long-planned skinny bundle has been stalled as the company seeks to sign-up a core group of TV networks for its service.

    All in all, the Q2 ’17 video subscriber losses reflect an industry that is certain to contract slowly but surely in the years to come, as viewers’ choices explode and consumption shifts online.

     
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