AT&T (NYSE: T) quietly revealed in a regulatory filing that its just-acquired DirecTV asset lost 133,000 satellite TV subscribers in the second quarter, putting an appropriate coda on a week in which cord-cutting concerns graduated to panic.
The huge attrition pushed the total number of pay-TV customers lost in the second quarter among the sector's top 10 publicly traded companies to 431,800, eclipsing the approximately 320,000 cable, satellite and telco TV customers lost in the second quarter of 2014. According to MoffettNathanson, factoring in all pay-TV operators, including privately held operations like Cox Communications, the sector's blood loss in the second quarter comes to around 566,000
Earlier Friday, Cablevision (NYSE: CVC) released second-quarter data showing a marked deceleration of video subscriber losses—the company only lost 12,000 pay-TV customers in the second quarter.
The DirecTV filing, which also revealed a 7 percent rise in quarterly profit for the satellite operator in its last full quarter of independent operation, was filed today after closing of the stock markets. Earlier in the day on Wall Street, pay-TV and major media stocks continued to slide amid what seems to be a watershed release of cord-cutting anxiety.
"Over the past three trading days we have seen more than $60 billion of market cap evaporate from the media and cable sectors, all in the name of cord-cutting," said MoffettNathanson analyst Craig Moffett in a note to investors filed late this afternoon. "Now that all the data from the quarter is in—we had been anxiously awaiting results from DirecTV, which were quietly released late Friday afternoon … and they were a big miss, with a loss of 133K vs. our estimate of a loss of 61K—we can finally judge what all the fuss was about."
Before Cablevision and DirecTV reported their quarterly metrics, the total second-quarter bloodshed for pay-TV's top publicly traded companies stood at around 286,800. With Cablevision's modest losses, it appeared the sector was on pace to match its 320,000 benchmark from a year ago, belying predictions by analysts like Moffett that the second quarter—typically a bad growth quarter for pay-TV—would take anxiety about consumers leaving the pay-TV ecosystem to a whole new level.
"Yes, folks, it was as bad as feared," Moffett said. "Cord-cutting did indeed accelerate markedly in the second quarter, just as we were afraid it would. And no, this is not about seasonality."
Fairing worse was the satellite sector, which lost 284,000 customers in the second quarter vs. just 78,000 in the same period of 2014.
Meanwhile, telcos AT&T U-Verse (NYSE: T) and Verizon FiOS (NYSE: VZ), which had been growing at a 12.3 percent clip, adding 291,000 subscribers in the second quarter of 2014, added only 4,000 in the second quarter of this year. Adding Frontier's loss of 6,000 customers, the telco sector actually receded by 2,000.
Almost every cable company improved its video subscriber metrics, and the 280,000 total lost video customers by MSOs in the second quarter of this year compared very favorably to the 534,000 lost in the same period of 2014.
That, of course, did nothing to turn the cord-cutting hysteria on Wall Street, where every cable company saw declines in their stock prices this week.
- read this DirecTV 10-Q filing
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