In the second quarter of 2023, the top traditional pay-TV providers in the U.S. market continued to experience a decline in subscribers, as more TV viewers decided to cut the cord and opt for streaming platforms. According to the latest statistics from Leichtman Research Group, the biggest pay-TV providers lost a total of 1.73 million net video subscribers during this three-month period. This number represents a slightly higher loss compared to the pro forma loss of about 1.72 million net subscribers in the second quarter of 2022.
Among the traditional pay-TV providers, cable providers fared the worst as they lost 925,000 video subscribers in the second quarter. This is a slight improvement compared to a reduction of about 950,000 subscribers in the same period last year. Comcast, in particular, experienced the biggest losses, with 543,000 video customers cancelling their subscriptions during the second quarter. Charter Communications also saw a decline of 200,000 subscribers.
When looking at the overall subscriber numbers, the top U.S. pay-TV providers currently have around 71.9 million subscribers. Out of this total, the top seven cable companies account for 35.9 million video subscribers, according to Leichtman data. Other traditional pay-TV services have around 22.7 million subscribers, while the top internet-delivered pay-TV services, like YouTube TV (also known as vMVPDS), have 13.4 million subscribers.
Despite the rise in popularity of streaming platforms, the vMVPDS category experienced a net loss of about 115,000 subscribers in the second quarter of 2023. This represents a higher loss compared to the loss of about 65,000 subscribers during the same period in the previous year. Over the past 12 months, Leichtman Research estimates that top pay-TV providers have lost about 5.3 million subscribers, compared to a net loss of about 4.23 million in the prior-year period.
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With major studios and other traditional media companies pivoting to streaming, the losses for legacy linear TV networks from cord-cutting were expected. However, as media giants like Comcast, Warner Bros. Discovery, and Disney invest more in their streaming platforms while Wall Street questions their profitability, doubts about the future of linear TV grow.
Macquarie media analyst Tim Nollen believes that linear TV networks have passed the point of no return, as the metrics for linear TV continue to decline. “We think the metrics for linear TV are all bad. The public pay TV operators (cable, telco, satellite) that we track reported a weighted average 9.6 percent drop year-on-year in subscribers, and the media network groups’ affiliate fee revenues were down 2.5 percent,” Nollen stated in an investors note.
Even with price increases, traditional pay-TV providers are unlikely to recover the ground they have lost. Advertising revenues also continue to come under pressure, especially with the ongoing Hollywood actors and writers strike, which threatens the delivery and release of TV series.
Here is a breakdown of the subscriber loss or gain among pay-TV providers in the second quarter of 2023, according to Leichtman Research Group and the companies themselves:
– Comcast: Lost 543,000 subscribers
– DirecTV: Lost 400,000 subscribers
– Charter: Lost 200,000 subscribers
– Dish TV: Lost 197,000 subscribers
– Fubu: Lost 118,000 subscribers
– Hulu + Live TV: Lost 100,000 subscribers
– Sling TV: Lost 97,000 subscribers
– Altice: Lost 69,900 subscribers
– YouTube TV: Gained 200,000 subscribers
Overall, the trend of cord-cutting and the shift towards streaming platforms continue to impact the traditional pay-TV market in the U.S. With more viewers opting for flexibility and personalized content options, linear TV networks face challenges in retaining subscribers and generating revenue.
