Online TV services including Sling TV and Playstation Vue added 962,000 subscribers in Q3 2017, which helped offset the 872,000 in subscriber losses traditional pay-TV providers experienced in the quarter, according to research firm MoffetNathanson, per Fierce Cable.
When factoring in online TV subscriber additions, the US pay-TV ecosystem added 90,000 subscribers in Q3 2017, up from a net loss of 275,000 in Q3 2016.
Though the nearly one million online TV service subscriber additions is promising, players in the pay-TV ecosystem still have reason for concern:
- This year has already seen more cord-cutting losses than all of 2016. The 872,000 in subscriber losses represents a 3.1% year-over-year (YoY) increase from 559,000 in Q3 2016. Roughly 2.6 million consumers cut the cord in the first three quarters of this year, while roughly 1.7 million did in 2016. The increase could be partially attributed to video streaming services like Netflix aggressively broadening content libraries, which may have made traditional TV less of a necessity for some consumers.
- Online TV service subscriber additions are not benefitting all TV networks equally. Disney, NBCUniversal, CBS, and Fox are in nearly every online TV bundle. Conversely, Discovery, A&E Networks, Scripps, and Viacom, and independent networks are in less than 50% of online TV services. Those networks left out of online TV bundles could partner with each other. By pooling their programming together, they could propose a more compelling and cheaper offering to bundle operators.
- And pay-TV subscriber losses could be worse than MoffetNathanson’s estimates.Kagan estimated total subscriber losses for Q3 2017 at 1.2 million, when factoring in losses of smaller cable companies, while Leichtman Research Group pegged total losses at 943,000. Regardless, it’s clear that analysts agree that cord cutting is accelerating in 2017.
- The revenue lost from cord cutting is projected to be greater than online TV service revenue. Online TV services typically are priced at about $30-$40 per month, while traditional cable packages cost about $100. While some cord cutters are captured by digital streaming services, media companies will lose over $13 billion in revenue over the next 10 years, according to Barclays cited by Bloomberg.
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