While Nielsen's report last week showing the pay-TV ecosystem had dropped below 100,000 subscribers was cause to raise eyebrows, it was the sub performance of individual networks that's the real cause for concern, Pivotal Research analyst Brian Wieser said.
Speaking to investors in a note obtained by Broadcasting & Cable, Wieser said that cord shaving is a much more prescient concern than actual cord cutting.
Nielsen has revealed across-the-board subscriber drops for individual networks. Relegated to add-on tiers amid the skinny-bundle trend, for example, ESPNU has seen its carriage decline by about 5.4 percent recently, according to Nielsen data.
Viacom, meanwhile, has seen a 4.1 drop in subscribers for CMT.
Speaking to investors in January, ESPN President John Skipper said programmers have yet to feel the financial impact of these declines.
"People trading down to lighter cable packages," he said. "That impact hasn't leaked into ad revenue, nor has it leaked into ratings. The people who've traded down have tended to not be sports fans, and have tended to be older and less affluent. We still see people coming into pay TV. It remains the widest spread household service in the country after heat and electricity."
The check, however, is in the mail, Wieser said.
"Affiliate fees are not necessarily impacted in the short-term as distributors will often be obliged to pay for certain minimum subscriber levels," Wieser notes. "However, over longer time horizons we think that the trends captured by Nielsen are likely to be reflected in the subscriber numbers that programmers get paid for."
For more:
- read this Broadcasting & Cable story
Related articles:
U.S. Pay-TV households dipped below 100M in Q4, Nielsen says
SNL Kagan: U.S. cord-cutting hit 1M in 2015 without Sling's 538K users factored in
ESPN's Skipper: Cord shaving dinging subs, but ad sales and revenue stronger than ever