Finance

Kagan: Pay TV Loses 976K in Q2

Record customer losses point to “unprecedented” annual decline, researcher says 8/16/2017 12:41 PM Eastern
Image courtesy Netflix

The legacy multichannel universe lost a record 976,000 video customers in the second quarter, better than expected but trends indicate the sector is in for an “unprecedented annual decline,” according to data compiled by Kagan, a group within S&P Global Market Intelligence.

According to Kagan, multichannel subscriptions dropped below 96.1 million in the second quarter, down 1.8 million since 2016, not including the two largest virtual MVPDs, Sling TV and DirecTV Now. Including those two services lifts the overall pay TV number to 98 million.

Kagan’s estimates were slightly higher than MoffettNathanson principal and senior analyst Craig Moffett’s – who put the losses at 941,000 for the quarter. But the message was the same – cord cutting is on the rise and consumers are increasingly moving to alternative content distributors.

Kagan estimated that cable operators lost about 246,000 video customers in the period, which coupled with a sizeable first quarter decline pushed total losses at the mid-year point up 55.6% annually. Satellite services also took a beating, losing 443,000 video subs to fall below the 33 million level for the first time since 2010.

Telco TV providers continued their downward slide, dipping below 10.9 million customers, as AT&T continued to emphasize its DirecTV platform over its wireline U-verse product. Kagan estimated that U-verse accounted for two-thirds of the losses in the telco segment.

Based on figures compiled from U.S. Census reports, Kagan estimated that 75.8% of the potential residential universe subscribe to a legacy multichannel product in the second-quarter.

 

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