Nov 8, 2018

On life support: Record number of pay-TV watchers cut the cord

Illustration: Rebecca Zisser/Axios

More than 1 million people ditched their cable and satellite TV packages last quarter, the most ever in a quarterly earnings period, according to research firm MoffettNathanson.

Why it matters: Americans are increasingly giving up on expensive cable and satellite TV packages for more affordable services delivered over a broadband connection.

By the numbers: More than 80% of pay-TV subscribers in the U.S. come from four cable and satellite providers: AT&T, Comcast, Charter and Dish. Those companies together lost 887,000 subscribers this quarter, mostly driven by big losses at Dish and AT&T.

  • Dish lost 367,000 customers, its highest quarterly loss ever, after cutting access to Univision amid a months-long carriage-fee dispute that is still unresolved.
  • AT&T lost 359,000 subscribers for the quarter, far surpassing analyst estimates of 245,000 subscribers lost.

The big picture: There are roughly 120 million TV homes in the U.S., per Nielsen, and about 90 million of them (75%) still pay for traditional TV. But that percentage has been decreasing as more people cut the cord.

  • In total, eMarketer predicts cord-cutting will grow more than 30% this year. eMarketer increased projections for cord cutting twice in less than a year, a sign that the trend is accelerating.
Expand chart
Adapted from an eMarketer report; Chart: Axios Visuals

Between the lines: Many pay-TV providers are hoping to offset losses with gains in subscribers to digital TV alternatives, like AT&T's DirecTV NOW or Dish's Sling TV.

  • But those companies haven't been able to come close to closing the gap, in part because of so much competition from other digital live TV alternatives, like Google's YouTube TV, Sony's PlayStation Vue and Fubo TV, as well as non-live TV alternatives with original programming, like Amazon and Netflix.
  • Both Sling TV and DirecTV Now are seeing slowed growth, making it even less likely that those digital alternatives will offset traditional subscriber losses for the two biggest pay-TV companies.
  • Total subscriber losses were roughly 500,000, the third-worst quarter in industry history and worst since Q2 2016, per BTIG Media Analyst Rich Greenfield.

The bottom line: Traditional pay-TV is in big trouble.

Go deeper:

Go deeper

Record number of original TV shows created in 2019

A whopping 532 original scripted television series were created last year, according to the latest data from FX Networks Research, up 7% from the year before.


Why it matters: In recent years, experts wondered if the TV market would eventually reach "Peak TV," or a point of total saturation. The new data suggests that hasn't happened yet.

Go deeperArrowJan 9, 2020

A record number of original TV shows were created in 2019

Reproduced from an FX Networks Research report; Chart: Axios Visuals

A whopping 532 original scripted television series were created last year, according to the latest data from FX Networks Research, up 7% from the year before.

Why it matters: The new data suggests that "peak TV" hasn't happened yet.

Go deeperArrowJan 14, 2020

Amazon wants Fire TV in more cars and devices

Amazon Fire TV products. Photo: Dia Dipasupil/Getty Image

Amazon made a series of moves at CES in Las Vegas, most notably announcing deals to get its Fire TV software built into more televisions, soundbars and even the back seats of cars.

Why it matters: In tech, it pays to control the operating system. Amazon found itself on the outside looking in when it came to smartphones, and wants to maintain a strong position in smart TVs, speakers and other emerging consumer devices.

Go deeperArrowJan 6, 2020