Cord-cutting reaches new heights in US

US pay TV posts ‘worst quarterly subscriber losses ever’.

by Andy Bassett May 8, 2019 at 9:12 AM

  • Movies & TV News

    Cord-cutting reaches new heights in US
    The rate at which US TV viewers appear to be abandoning traditional cable and satellite TV companies as they migrate to cheaper, more flexible online subscription services appears to have reached new heights, according to one report.
    The first three months of 2019 saw traditional US pay TV companies lose over a million customers, according to research and finance group BTIG. This follows the loss of over 3.2 million customers during 2018 and points to a predicated upheaval in 2019 for the big cable and satellite providers, claims the report's author in a blog post.

    Known as cord-cutting, the term is used to describe a situation where traditional, multichannel pay TV services from cable or satellite providers are dropped in favour of cheaper (sometimes free) and more manageable streaming subscriptions from OTT (over the top - i.e. over the internet) providers such as Netflix, Amazon Prime, Hulu and YouTube Premium. Big pay TV losers in Q1 2019 include AT&T, Dish and Comcast who are all haemorrhaging customers.

    To help stem the losses, pay TV companies had started to offer their own streaming services in order to emulate the advantages of anytime, anywhere, on-demand content offered by the OTT providers. Known as ‘skinny’ bundles due to the cut-down nature of the package, which was reflected in more attractive pricing, even these have failed to reverse the trend.

    Data from the last few years shows that the large pay TV corporations have had sporadic losses in their customer base before but the most recent results show an accelerating decline which paints a poor overall picture. The graph below shows the subscription gains and losses for pay TV MVPDs (multichannel video programming distributors) and vMVPDs (virtual multichannel video programming distributors - the skinny bundles described above).

    From the other side of the fence, streaming subscription services are looking buoyant, with Netflix recently reporting healthy growth for the first quarter of the year. Hulu also announced its customer base has expanded to 28 million.

    However, the situation is about the get challenging for all concerned parties as major players such as Apple and Disney gear up to enter the arena with their own high profile streaming services. This could make waves for both the pay TV companies, who are already losing customers to a more nimble attractive competitor, but also to established streaming companies such as Netflix, who find themselves up against new streaming providers who are both offering something a little different. The promise of a 'new shiny plaything' could be compelling for many consumers.

    Are you an AVForums visitor from the US? Perhaps you could let other Forums members in the UK and rest of the world know what you think of the state of pay TV vs streaming services in the United States.

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