Major pay-TV operators made it through another quarter without any substantial acceleration in cord-cutting, according to industry data tallied by analysts MoffettNathanson. In Q2 ’16, pay-TV operators lost an estimated 757K subscribers, compared with a loss of 683K subscribers in Q2 ’15. Note also that the second quarter is always the seasonally weakest. When estimated Sling TV subscribers are added in, the loss declines to 708K in Q2 ’16 vs. 613K lost in Q2 ’15.
In a continuing trend, cable operators again picked up market share at the expense of telcos and satellite providers. Cable’s loss in Q2 ’16 declined to 242K subscribers from 404K lost in Q2 ’15, while telcos swung from a gain of 5K subscribers in Q2 ’15 to a loss of 526K subscribers in Q2 ’15. AT&T accounted for the vast majority of that loss (minus 391K) as it transitioned U-Verse subscribers to DirecTV. Verizon had a loss 41K vs. a gain of 26K a year earlier as it experienced an employee work stoppage.
Topics: MoffettNathanson LLC
Comcast reported its Q2 ’16 earnings this morning, once again showing strong improvement in video subscribers and keeping cord-cutting in check. The second quarter is always seasonally slow in the pay-TV business, but Comcast reduced its video subscriber loss to just 4K in Q2 ’16, its best performance in over 10 years. The trend in just the past 4 years is impressive; Comcast has steadily reduced its subscriber loss from minus 69K in Q2 ’15, minus 144K in Q2 ’14 and minus 162K in Q2 ’13.
Comcast is on an epic roll. Despite years(!) of cord-cutting warnings by the blogosphere and analysts, Comcast once again proved the naysayers wrong, adding 53K video subscribers in Q1 ’16. It was the best first quarter in 9 years for the company and easily eclipsed the loss of 8K subscribers in Q1 ’15.
The Q1 gain builds on the strong year Comcast recorded in 2015, losing just 36K subscribers vs. a loss of 194K in 2014. Remarkably, Comcast now has 25K more video subscribers that it did one year ago (22,400K vs. 22,375K).
I'm pleased to present the 313th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
This week brought 2 data points that seem at odds with one another: even as SVOD penetration has crossed 50% penetration of U.S. TV households, cord-cutting remained minimal, with the pay-TV industry losing just 385K subscribers in 2015.
While that number is up substantially over 2014’s loss of 150K, it still represents just a .4% contraction. That seems relatively modest given Netflix alone is now in 45 million U.S. homes. Many had predicted that as SVOD grew it would be a substitute for pay-TV, but increasingly it seems like a complement.
Colin asserts SVOD will indeed be a substitute for pay-TV for many in the years to come with cord-cutting sharply increasing. There are lots of reasons to believe this, and yet pay-TV continues to remain quite resilient. We debate how things will unfold.
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Cord-cutting remains one of the industry most-talked about themes, but it still appears relatively muted. According to Leichtman Research Group’s calculations, the 13 biggest pay-TV operators, which account for about 95% of the industry, lost approximately 385K subscribers in 2015. While that’s up from a 150K loss in ’14 and 100K loss in ’13, it still represents a minuscule .4% subscriber contraction, hardly the free fall many observers have long been predicting.
Topics: Leichtman Research Group
Perhaps the biggest question weighing on the pay-TV ecosystem these days is whether younger viewers who have acclimated themselves to a strictly SVOD diet will eventually become pay-TV subscribers or whether they’ll remain “cord-nevers.”
The traditional narrative is that as younger viewers settle down, buy a house, make more money and have kids they’ll end up subscribing to pay-TV just like their parents did. With the booming array of inexpensive OTT substitutes, that expectation has become feeling ever more tenuous.
But a new survey of 1,111 U.S. 18+ year-olds by Clearleap seems to suggest the narrative still has legs, with 91.3% of those over 30 years-old saying they either currently or previously subscribed to pay-TV. That’s a big jump from the 73.5% of 18-29 year-olds that said they have subscribed at some point, which means 26.5% of the age cohort are technically “cord-nevers.” 64.4% of 18-29 year-olds say they currently subscribe to pay-TV while the subscription rate for all respondents to pay-TV was 78.9%.
I'm pleased to present the 290th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
On this week’s podcast we do an in-depth Q&A with our guest Lee Berke, who runs LHB Sports, Entertainment and Media, Inc. Lee has helped dozens of teams create and implement sports TV networks. He has a wealth of insights into the role of sports in pay-TV and how online and mobile video are causing leagues and teams to adjust their traditional distribution strategies.
Sports are a key driver of increased pay-TV rates and as VideoNuze readers know, I’ve been writing for years (examples here, here, here) about the billions of dollars non-fans pay each year in the form of a “sports tax” - subsidizing expensive sports networks they never watch. With the advent of robust, inexpensive OTT entertainment programming options, the pay-TV multichannel bundle has come under more pressure than ever, with subscriber losses peaking in Q2 ’15.
In our Q&A with Lee we explore these issues and how he sees OTT impacting teams, leagues and sports TV networks. Lee believes TV will remain the most significant revenue source in sports for the foreseeable future, but also sees the leagues more aggressively experimenting online to serve a new generation of fans. Lee also describes how he’s advising teams, particularly on how to maintain flexibility and capitalize on new technologies.
Listen in to learn more!