With five out of the top seven publicly traded linear pay TV platforms, including the top three, reporting customer numbers, it appears the industry’s record-bad third-quarter subscriber losses could indeed surpass 1 million users, as some analysts have predicted.
In the past week, Verizon said it lost 18,000 Fios TV users in Q3. AT&T then reported losses of 251,000 for DirecTV and 134,000 for U-verse; on Thursday, Comcast and Charter posted TV customer losses of 125,000 and 104,000, respectively.
During the third quarter of 2016, these same companies added a modest 29,000 video users—or 354,000, discounting AT&T’s planned obsolescence for its U-verse IPTV service.
Still to report: Altice USA and Dish Network, neither of which have specified an earnings date. Dish is believed to once again have big losses to talk about. Privately held Cox Communications, the third largest U.S. cable operator, also has to be factored into the mix.
Two weeks ago, UBS analyst John Hodulik predicted that cable, satellite and telco operators would collectively lose more than 1 million customers in Q3 across their linear platforms. Analysts had predicted the same thing for the second quarter, which is usually the worst three-month period for operators in terms of subscriber growth.
The market fell just short of the inauspicious metric in Q2, losing 978,000 linear customers, according to SNL Kagan.
But with hurricane disruption compounding the mass customer migration of U.S. consumers to OTT services, Q3 looks poised to generate big, hyperbolic headlines about cord-cutting in the coming weeks.
The losses don’t factor in virtual platforms like DirecTV Now, which gained 296,000 customers in the third quarter, according to AT&T.
Analysts, however, have generally been dismissive of virtual MVPDs as, er, direct replacements for linear services. “DirecTV’s OTT service is one of no less than five competing vMVPD services, none of which is charging enough to make money,” said MoffettNathanson analyst Craig Moffett.
In the same memo to investors, Moffett noted that the linear pay-TV business has grown to a customer shrinkage rate of around 3.4% from 1.4% a year ago, when AT&T made its bid for Time Warner Inc.