Pay-TV loses over 1MN subs for the first time ever in Q3
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Michelle Clancy
| 10 November 2018

Even though for many revenues stayed steady, traditional TV providers in the US have just seen their worst quarter ever for subscriber losses collectively losing about 1.1 million customers in the third quarter, according to numbers-crunching by MoffettNathanson.

Despite years of concern over cord-cutters, the reality is that the drain to OTT services have been incremental. The period from June to September however marked a potential new chapter: It’s the first time that the sector has lost more than a million subscribers in a quarter.

In satellite, Dish Network this week said that it lost 341,000 net subscribers in the third quarter, compared to adding 16,000 in the same period a year ago. That number includes the loss of 367,000 legacy satellite subscribers and the far-worse-than-expected additions of 26,000 Sling TV subscribers.

DirecTV meanwhile lost a net 297,000 subscribers during the quarter, with a similar makeup: Around 359,600 satellite subscribers fled the nest, while only 49,000 new subscribers signed up for the DirecTV Now streaming service.

The two satellite services saw a total loss of 980,000 customers in the last 12 months.

The braking growth for DirecTV Now and Sling TV could suggest "price sensitivity" for skinny TV packages, according to MoffettNathanson, which noted that both raised its subscription costs recently.

IPTV services, once a bright spot in the industry as telcos trenched fibre to new towns, lost 104,000 customers across AT&T U-Verse and Verizon FiOS services, according to the firm. Both have lessened their focus on television in favour of higher-margin broadband services, especially Verizon, which lost a whopping 63,000 FiOS TV subs in the quarter.

Cable TV providers were the only ones to show some hope in terms of trend lines: This sector, which includes Comcast, Charter and Altice USA, among others, lost a combined 293,000 for the quarter, compared to 322,000 in the same period a year ago. This shows that cable trends "are getting marginally better," MoffettNathanson said.

Market leader Comcast saw a decline of 96,000 video subscribers, compared with a loss of 136,000 the previous quarter, marking its sixth consecutive quarterly loss but a slowing churn rate. Charter meanwhile lost 66,000, compared to a loss of 104,000 in the third quarter the prior year. And Altice USA lost 28,000 between Optimum and Suddenlink, compared with 32,000 a year before – the company also returned to profit in the quarter.

The results are a disappointment in the context of second-quarter results, which showed that the top pay-TV providers lost about 415,000 subscribers in the April to June period – the fewest net losses in four years. However, MoffettNathanson said that this seemingly good news was actually an optical illusion: The second quarter saw a jump in new households, which show up in the statistics as new pay-TV subscribers.

"Cord-cutting does not appear to be slowing at all," MoffetttNathanson said.

The top 10 services for the United States in informitv’s Multiscreen Index now have 82.72 million television customers between them, accounting for slightly less than 70% of television homes