Make it two years running where traditional pay-TV providers have topped 3 million in video subscriber losses, as a new study – which traditionally has been conservative in reporting those numbers – reports that 3.515 million customers cut the cord in 2018, 13% more than the 3.111 million it lost last year.
And last year’s ray of hope for tradition pay-TV providers – virtual services like Sling TV and DirecTV Now – was distinctly less reassuring in 2018 than in 2017, with the two adding just 640,000 subscribers in 2018 compared to 1.6 million a year ago, a decline of some 60%; combined the net loss of customers for the industry was 2.875 million this year, compared to 1.51 million in 2017, nearly double (90%) last year’s abysmal performance.
Hardest hit, said Leichtman Research Group, were satellite providers, with Dish and DirecTV both losing more than 1.1 million customers, bigger losses than the entire cable segment (down 910,465 – led by Comcast’s decline of 371,000) and telco losses in excess of 244,000.
YouTube TV and Hulu Live – neither of which publicly report subscriber numbers – are rumored to be growing with YouTube at 1 million subs and Hulu Live at 2 million; much of that growth occurred in 2018. YouTube, which has slowly been expanding into new markets, last month announced it would soon be available anywhere in the U.S.
Historically, traditional pay-TV subscriber erosion began in 2013. But, the acceleration in the past three years has the industry’s collective heads spinning.
It shouldn’t. The relentless migration of consumers online to watch content when they want, on the devices they choose, wherever they happen to be, has been steadily growing. And, as more content, especially high-value premium entertainment and sports content, has been made available to consumers, they’ve embraced it.
The growth of virtual MVPDs has been a natural first big step for pay-TV companies – Charter and Comcast both are getting ready to expand there, as well – and for consumers looking to leverage Internet-delivered content. But, how long will vMVPDs be able to sustain growth, or, more accurately, be able to pick up the customers traditional MVPDs are losing?
Early adopters of vMVPDs already are looking for more personal experiences outside those delivered by services offering “skinny” bundles (which are getting fatter by the minute as operators refuse to turn a tired business model loose).
Instead, they’re building their own virtual services, increasing the number of a la carte offerings from VOD to live sports, a trend that operators, content owners and broadcasters would be wise to watch.
The bottom line: Consumers won’t slow down their march to the Internet or their adoption of over-the-top entertainment and, despite wishful thinking, they’ll never return to the “good old days” of traditional pay-TV. Been there, dumped that. To reach viewers, especially younger ones, over-the-top – especially to mobile devices – is the way forward, with a la carte clearly on the near horizon.