• Cord-Cutting Slows in Q3 as Virtual TV Providers Jump

    Cord-cutting slowed down in Q3 ’20, with top pay-TV providers in the U.S. losing around 120K subscribers, according to Leichtman Research Group. These pay-TV providers account for about 95% of total pay-TV subscribers in the U.S. In Q3 ’19, on a pro forma basis, this group of providers lost approximately 945K subscribers.

    While top traditional pay-TV providers all improved their performance in this year’s third quarter, a key driver of overall industry performance was virtual pay-TV providers, which recorded their best quarter ever. According to LRG, four of the virtuals (Hulu + Live TV, Sling TV, AT&T TV Now and fuboTV) collectively added 1.035 million subscribers in Q3 '20. Hulu + Live TV was by far the biggest contributor, with 700K additions, making it now the fifth largest pay-TV provider with 4.1 million subscribers.

    Overall, virtual providers LRG included have nearly 7.7 million subscribers. YouTube TV is not in LRG’s reporting group because it doesn’t disclose quarterly results, but Google said it added a million subscribers through Q3 to reach three million. So with YouTube TV, the virtuals would be well over 10 million subscribers, more than the 8 million Verizon and AT&T have together (not counting DirecTV).

    LRG called out the return of live sports in Q3 as a factor in virtuals’ quarterly performance, and this was surely a positive for traditional providers’ bounce back as well. Due to Covid, Q3 ’20 is an anomaly and my podcast partner Colin Dixon notes that sports’ tailwind will trail off in Q4 as the NFL is the only big league still on until NBA kicks off in late December. Hulu also just announced another $10 per month rate increase, further diminishing its low-price value proposition, and likely reducing demand.

    Among traditional providers, seven large cable providers lost 375K subscribers in Q3 ’20 (vs. 410K lost in Q3 ’19), the two large satellite providers, DirecTV and DISH, lost 775K in Q3 ’20 (vs. 1.14 million lost in Q3 ’19) and the three large telcos, Verizon, AT&T and Frontier lost 5K subscribers in Q3 ’20 (vs. 210K lost in Q3 ’19).

     
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