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

Updated 52 mins ago - Politics & Policy

Esper catches White House off guard with opposition to military use, photo op

Defense Secretary Mark Esper said at a press briefing Wednesday that he does not currently support invoking the Insurrection Act, an 1807 law that permits the president to use active-duty troops on U.S. soil, in order to quell protests against racial injustice.

Why it matters: President Trump threatened this week to deploy military forces if state and local governments aren't able to squash violent protests. Axios reported on Tuesday that Trump is backing off the idea for now, but that he hasn't ruled it out.

Updates: George Floyd protests continue for 9th day

Demonstrators march on Pennsylvania Avenue on June 3. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

Largely peaceful protests over the death of George Floyd and other police-related killings of black people continued Wednesday, marking nine straight days of demonstrations.

The latest: As several major cities moved to lift curfews, NYPD officers "aggressively" dispersed large crowds in Brooklyn and Manhattan beyond New York City's 8 p.m. curfew, per the New York Times. The National Guard was stationed outside many protests Wednesday night, including in Hollywood and Atlanta.

Trump hits back at Mattis: "I gave him a new life"

President Trump speaks at the White House. Photo: Doug Mills - Pool/Getty Images

President Trump unloaded on his former defense secretary via Twitter on Wednesday, hours after James Mattis condemned him for making a "mockery of our Constitution" in his response to mass protests in the wake of George Floyd's killing.

What he's saying: "Probably the only thing Barack Obama & I have in common is that we both had the honor of firing Jim Mattis, the world’s most overrated General. I asked for his letter of resignation, & felt great about it. His nickname was 'Chaos', which I didn’t like, & changed it to 'Mad Dog'"