Yet another report out today pointing to growing U.S. pay-TV subscriber losses as customers continue to bail on traditional television.
Leichtman Research Group (LRG) said the 11 biggest pay-TV providers in the U.S. lost about 665,000 subscribers in Q2, an increase of more than 22% compared to the 545,000 it lost in Q2 2015.
That brings losses over the past year to more than 705,000, 86% more than the previous year when the industry lost 380,000 customers.
And that includes major gains by Dish Network’s over-the-top offering Sling TV.
“The top pay-TV providers lost about 665,000 subscribers in the traditionally weak second quarter, with net losses in 2Q 2016 surpassing the previous quarterly low set in last year’s second quarter,” said Bruce Leichtman, president and principal analyst for LRG.
The top pay-TV providers account for 93.75 million subscribers – with the top six cable companies having 48.9 million video subscribers, satellite TV companies having 34.0 million subscribers (including as many as 800,000 from DISH’s Internet-delivered Sling TV), and the top telephone companies having 10.8 million subscribers.
LRG said the top six cable companies lost about 225,000 video subscribers in 2Q, 33% better than a year ago. Telcos, on the other hand, took a hit… down 500,000 in the quarter compared to a gain of 10,000 a year ago.
The telco losses are a significant reversal from the past several quarters where the bright spots – generally – were Verizon and AT&T, which were expanding into new markets and cherry picking 5% to 8% of existing cable customers.
Both, however, have shifted their focus. AT&T is pushing its recently acquired DirecTV satellite pay-TV service heavily, offering discounted services to gain share and also is about to launch its over-the-top DirecTV service that it believes will be a potential market changer.
Verizon, meanwhile, has been less successful with its big push into mobile video, as its Go90 over-the-top play has seen lukewarm uptake from subscribers. To an extent, it’s a service without a following, even among the Millennials it’s initially been targeted at, lacking both a big marketing push and, more critically, content that can draw an audience.
Can the telcos turn around? Maybe, but they’ll see a lot more subscribers churn before it gets any better.
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