2019 has been a brutal year for video subscriber losses, and the trend could carry over into 2020.
UBS predicted that the U.S. pay TV industry will lose another 6.2 million video subscribers in 2020, down slightly from the 6.4 million the analyst firm predicts will be lost in total this year. If that loss comes to bear it will represent a 6.7% rate of decline, ahead of 6.2% in 2019 and well ahead of 1.2% in 2018 when video subscriber losses totaled 1.2 million.
It may not all be consumers cutting the cord, though. PwC said total pay TV subscribers remained consistent at 68% during the third quarter, compared to 67% in 2018. While traditional pay TV subscribers fell from 40% to 39%, cord trimmers rose from 27% to 29% and cord cutters fell from 25% to 23%. Cord nevers rose from 8% to 9%.
If the trend is indeed shifting toward subscribers cutting back on video packages instead of dropping them all together, then the user experience becomes an even more important tool to prevent subscribers from churning completely. Comcast’s X1 is a clear leader among pay TV platforms, and now the company is investing in its Flex program to help ensure its broadband subscribers don’t need to go far if they decide to return to video. It’s likely that Charter will explore something similar (or perhaps license the Flex platform) in 2020 while focusing investment on its existing pay TV platform, now that the Charter-Time Warner Cable-Bright House integration is essentially done.
AT&T is also shifting away from its legacy TV services (DirecTV and U-verse) toward AT&T TV, its new IP-based streaming TV service launching in February. AT&T TV looks to simplify the installation process and give consumers a more flexible, functional user experience that takes advantage of Android TV bells and whistles like Google Assistant voice commands.
In 2020, AT&T, Altice USA, Charter, Comcast and others will need to continue improving and evolving the user experience on their platforms to stanch the video subscriber losses.