Pay-TV Subscriber Loss Continued in 2016, But Cable Losses Narrowing, Says Report
Leading U.S. pay-TV providers lost roughly 795,000 net video subscribers last year vs. a loss of about 445,000 subscribers in 2015, said a Thursday Leichtman Research Group report. The top providers, representing 95 percent of the market, had 93.6 million subscribers, said Leichtman, with the top six cable companies with 48.6 million, satellite TV services about 33.5 million and telcos about 10.1 million. The leading internet-delivered pay-TV services have about 1.4 million subscribers, it said.
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Cable pay-TV’s losses narrowed in 2016, with the top six cable companies losing about 280,000 million subscribers vs. a loss of 410,000 in 2015 and 1.2 million in 2014, said Leichtman. Cable industry subscription losses were the lowest since 2006, when telcos began offering video services, it said.
Satellite TV services added about 190,000 subscribers in 2016 vs. a loss of 450,000 in 2015, said the research firm. DirecTV, propped up by AT&T, added 1.2 million subscribers vs. 167,000 in the prior year, while Dish Network lost just over a million subs in 2016, it said.
Video subscriber losses for the top telco providers widened to 1.5 million last year vs. a loss of about 120,000 in 2015 and a gain of 1.1 million in 2014, said the report. U-verse subscriptions fell by 1.3 million last year, largely due to AT&T’s focus on higher-margin DirecTV subscribers, it said, and Fios gained 59,000 subs. Internet-delivered Sling TV and DirecTV Now added about 845,000 subscribers in 2016 vs. 535,000 net adds in 2015, said the report.
The move to internet-delivered services and share shifts among traditional providers are driven “as much by providers’ decisions as by changes in consumer demand,” said analyst Bruce Leichtman.
Meanwhile, 20 percent of U.S. pay-TV subscribers say they're dissatisfied with their pay-TV service, a 100 percent spike since early 2013, said a Parks Research report Thursday. A third of subscribers said they were very satisfied with service, down from 57 percent in 2013, it said.
“High satisfaction with pay TV has dropped across all providers,” said Parks analyst Brett Sappington, with telco services seeing the highest drop in highly satisfied customers compared with cable and satellite providers. The plummeting satisfaction levels affect service/channel package upgrades, cord cutting, engagement and perception of operator-driven service changes such as dropped or added channels, Sappington said.
Five percent of U.S. broadband households have never subscribed to a pay-TV service, said Parks, with adoption declines most notable among younger heads of household. “The pay-TV industry continues to experience worldwide growth, but the North American market is experiencing a decline in penetration,” Sappington said, citing high monthly fees and a wide selection of available OTT services that are pushing consumers away from traditional pay TV.
To adjust, operators are partnering with OTT video services or launching independent OTT services, Sappington said. Promotions such as free or subsidized customer premises equipment “could entice potential Cord Cutters or Cord Shavers to keep their services,” said the research firm.
More than 63 million U.S. broadband households subscribe to an OTT video service, and 36 percent of U.S. broadband households have at least one streaming media player, said Parks. The top 10 U.S. OTT subscription video services at the end of 2016 were Netflix, Amazon Prime Video, Hulu, MLB.TV, WWE Network, Sling TV, HBO Now, Crunchyroll, Showtime and CBS All Access, it said.