The pay-TV industry is bleeding subscribers
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.”
Why ethical dilemmas are putting brands and their media buying in the spotlight
As the U.S. presidential inauguration comes to pass, marketers are increasingly aware that what they buy has an impact on society.
WTF is a SPAC?
An increasing number of companies, including media organizations, are turning to SPACs as a non-traditional means of taking their companies public.
‘Elevate the next generation’: As social platforms begin Black creator programs, critics say they need to do more
As social platforms launch Black creator programs, Black creators say they need to do more in support of diverse creative voices.
SponsoredThe evolution of shoppable content lies in social media streams
With the physical and social aspects of shopping stripped away due to various lockdown restrictions around the globe, shoppable social media is poised to fill the void. In a recent example, Instagram launched its Reels and Shop tab for users to connect with brands and creators — and to discover products. The social media platform will […]
‘Connect the dots’: Why publishers are investing in local media to round out big national stories
Publishers are sensing an opportunity and a responsibility in 2021 to invest more money and focus in reporting out national stories at a local level.
‘Media responsibility is now corporate social responsibility’: Marketers reassess brand safety controls to navigate a divided America
Keyword blocklists are increasingly part of rather than the crux of brand suitability strategies.