US pay-TV sees continued decline with Q1 subscriber drain | Major Businesses | Business | News | Rapid TV News
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The first quarter of 2016 was not a good one for pay-TV subscriptions in the United States, according to the latest SNL Kagan quarterly compendium of subscriber totals across segments.

ott pay tvThe report found that the combined cable, direct-broadcast satellite (DBS) and telecommunications (telco) sectors lost 162,000 video customers during the period.

This follows year-end figures from SNL Kagan showing that pay-TV sectors lost more than a million video customers in 2015, showing a continued downward trajectory in multichannel subscriptions.

Satellite was the winning platform, gaining 166,000 subscribers thanks to good DirecTV performance; DISH lost customers as it continues to develop upper-tier packages with higher ARPU in an effort to boost profitability.

Cable operators lost only 18,300 total video customers, meaning that MSOs saw their best first-quarter in eight years. The last time the sector added subs for Q1 was in 2008, when operators grew their combined video customer base by a combined 6,000.

Telco losses however accelerated as AT&T’s shift away from U-verse gained momentum. Driven by U-verse losses, multichannel video subscribers served by the segment were down nearly 4% from its peak of 13.2 million mid-year 2015.

DISH Network’s Sling TV streaming service meanwhile has an estimated 677,000 customers, which when factored in would halve the losses to just 499,000.

The 2015 decline was more than four times that shown in 2014, marking the third consecutive overall annual drop for the industry. If Q1 is any indication, there’s no sign that’s turning around.

It’s interesting considering research from TDG shows that those likely to downgrade their pay-TV service in the next six months are more dependent than others on over-the-top (OTT) streaming services like Netflix and Hulu. The firm found that among those moderately or highly likely to downgrade their pay-TV service in the next six months, 29% of their TV time is spent watching streaming sources. That’s significantly more than those neutral or unlikely to downgrade.

“The variety, reach and personalisation of OTT TV services continues to grow,” said Michael Greeson, TDG director of research. “While not yet a mainstream replacement threat, OTT TV is most certainly a key factor in downgrade considerations.”

Overall, among those pay-TV subscribers who also stream OTT content to a home TV, TDG found that 36.1% will definitely downgrade, 26.4% are moderately likely to and 21.4% are slightly likely to. Only a fifth (21.9%) are neutral or unlikely to downgrade.

This type of cord-shaving is going to be a boon for other streamers, too. Looking at prospects for the business of TV over the next 12 months, media analyst Seeking Alpha sees 2016 as a catalyst year for YouTube with the trend of cord-cutting/shaving.