The largest U.S. pay TV providers, representing about 95% of the market, dropped about 410,000 net video subs in Q1 2017, versus a gain of about 10,000 subs in the year-ago quarter, according to Leichtman Research Group.
LRG said it’s the first time that those major providers had a net loss of video subs in a first quarter, and appears to factor into a small but accelerating cord-cutting trend. LRG attributed to the decline to multiple other factors, noting that some providers have dialed back their pursuit of lower value customers.
Those service providers ended the quarter with 93.3 million subs – 48.6 million for the top six cable operators, and 33.2 million for satellite TV, and 9.8 million subs among the top telco TV providers.
The top OTT-powered pay TV services – notably Dish-owned Sling TV and AT&T’s DirecTV Now, added about 350,000 subs in Q1, ending the quarter with a combined 1.7 million subs, LRG estimated.
Without virtual MVPDs factored in, traditional pay TV services lost about 760,000 subs in Q1, widened from a loss of 120,000 in Q1 2016.
Among individual segments, the top six cable operators combined to lose about 115,000 video subs in Q1, versus a gain of 50,000 in Q1 2017. DirecTV and Dish Network lost about 320,000 satellite TV subs, off of a year-ago gain of 175,000, with the losses largely pinned on Dish, as DirecTV had flat sub growth in the period. The top telcos lose 325,000 video subs, narrowed slightly from a year-ago loss of 350,000.
In that group of traditional MVPDs, Comcast was an outlier, as it added 41,000 subs in Q1.
“The pay-TV market lost about 410,000 subscribers in the first quarter of 2017. This marked the first time that the industry has ever had net subscriber losses in the first quarter of a year,” Bruce Leichtman, president and principal analyst for LRG, said in a statement. “The decline in subscribers should not be interpreted as solely driven by a sudden increase in consumers disconnecting services. The net losses are also a function of a decrease in new connects, partially due to some providers less aggressively pursuing lower value customers than in the past.”