Nine passes left to attend the Digiday Publishing Summit

Cord-cutting has graduated from media-panel buzzword to a real consumer behavior.
In aggregate, U.S. pay-TV providers lost 31,000 subscribers in the first quarter of 2015, a steep decline from the 271,000 subscribers they gained in the first quarter of 2014, according to research firm MoffettNathanson. IHS Technology market research shows the pay-TV industry shed an even greater 33,500 subscribers in Q1 2015. Over the past four completed quarters, pay-TV operators have lost 461,000 subscribers, representing a 0.5 percent industry contraction, MoffettNathanson reported.
That industry-wide contraction could accelerate as digital video grows in prominence, Internet connections improve, and “over-the-top” (OTT) services such as Netflix and Hulu make it easier to pipe top-notch video content through the Web to living room TVs. “This is a very real threat [for the pay-TV industry] that is going to occur,” said Erik Brannon, senior analyst at IHS Technology. “It may not be a question of if, but when.”
Television remains a dominant force in the advertising landscape, with scale unrivaled by digital video. On its own, the Q1 subscriber decline will not have major implications for media buyers, but it’s symptomatic of other contractions in the television space, said Alan Wolk, senior analyst at The Diffusion Group.
“The upfronts are this week, so this is going to make everybody’s job a little tougher, because overall viewership numbers are down, let alone how many people are subscribing,” said Wolk. “It’s really clear that non-ad-supported services like Netflix and HBO Now are taking away some of the daily-television viewership.”
For pay-TV providers, “cord-nevers” — people who never sign up for pay TV in the first place — are also part of the problem. It’s difficult to parse the two, yet as 900,000 new U.S. households formed in Q1 2015 (according to MoffettNathanson), the pay-TV industry contracted, which suggests cord-nevers are having an impact.
Dish Network fared the worst of the major providers in Q1 2015, losing 134,000 pay-TV subscribers, compared to a 40,000 subscriber increase in the same period last year. AT&T gained just 50,000 subscribers in Q1 2015, compared to 201,000 subscribers in Q1 2014. Comcast lost 8,000 subscribers, versus a 24,000 subscriber gain in Q1 2014.
To be sure, the pay-TV industry is far from dead, with a roughly 90 percent penetration rate in the U.S., said Wolk. The cable providers in particular are doing well as they roll out more high-speed data offerings, said Brannon, which offer better margins than the pay-TV business.
“Profits from high-speed data are going to contribute more to the bottom line,” said Brannon. “In general, pay-TV operators are mitigating the loss of pay-TV subscribers by any means.”
More in Media

Substack creators attribute their boost in subscribers to the platform’s community tools
Substack’s ongoing efforts to win over creators by becoming a community platform are winning over writers who value being part of a vibrant creative community.

Media Briefing: Here are the hurdles to Perplexity’s pitch as the publisher-friendly LLM
Publishers are cautiously optimistic about Perplexity’s new revenue share model, but remain concerned about issues of adoption, payment terms and transparency.

How Gabriella Gomez built a six-figure career on TikTok Live without signing sponsorship deals
Top U.S. TikTok Live star Gabriella Gomez has made livestreaming on TikTok into a lucrative career — without relying on brand partnerships.