The impact of cord-shaving and cord-cutting is continuing to be felt by pay-TV providers, who lost about 1,495,000 net video subscribers in 2017, according to an annual survey by Leichtman Research Group. Those losses are nearly double to pro forma level of 760,000 in 2016.
Helping counter some of the drops has been the rise of so-called “skinny bundles” — Internet-delivered services such as Sling and DirecTV Now. Subscriptions to the ones that publicly report numbers soared 90% from 2016 to 2017, with 1.6 million new subscribers in 2017, compared with 1,145,000 net additions in 2016. There are now 3.4 million Internet TV subscribers in the U.S., LRG estimates — and that tally doesn’t include PlayStation Vue, Hulu With Live TV or YouTube TV because they have not publicly disclosed numbers.
Satellite services took the biggest hit of any providers in 2017, perhaps in part because the major ones, DirecTV and Dish, are aggressively promoting cheaper, contract-free Internet options. They surrendered 1,550,000 subscribers in 2017, compared with a far smaller dip of 40,000 in 2016. The top six traditional cable companies also faced significant erosion, losing 660,000 subscribers, compared with a downturn of 275,000 in the prior year.
“The pay-TV market saw net losses increase in 2017, and the continuation of a share shift from traditional services to newer Internet-delivered services,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group. “Satellite TV services, DirecTV and Dish TV, had more combined net losses in 2017 than in any previous year, yet these losses were offset by gains from their Internet-delivered flanker brands, DirecTV Now and Sling TV. Overall, the top pay-TV services lost 1.6% of subscribers in 2017 compared to a loss of 0.8% in 2016.”
The operators tracked by LRG, a boutique research firm whose main focus is the dynamics of the cable bundle, represent about 95% of the total market, with more than 92 million subscribers. The top six cable operators account for 48.1 million, with satellite TV another 31.5 million and telcos such as Verizon and AT&T reporting 9.2 million.