Top Pay TV Providers Lost 410K Subs in Q1

Is first time they produced net losses in a first quarter, according to Leichtman Research Group
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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.

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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.

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“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.”