Traditional pay TV providers lost nearly 2M subs in Q3, Kagan says

cord cutting
AT&T drove the vast majority of the video subscriber losses during the previous quarter, both for traditional and virtual MVPDs. (Alyssa & Colin/Flickr)

Thanks largely to a drastic video subscriber drop off at AT&T, traditional pay TV providers lost close to 2 million subscribers combined in the third quarter.

According to Kagan, a TMT research group within S&P Global Market Intelligence, traditional pay TV providers (including cable, telco and satellite operators) lost approximately 1.9 million video subscribers in the third quarter. That’s 25% higher than the previous largest drop in the second quarter of 2019. Cable, telco and DBS providers ended the quarter with a combined, estimated 85.1 million video subscribers, down more than 5.8 million in the trailing 12 months at a 6.4% year-over-year rate of decline.

Kagan estimated that virtual MVPDs helped reduce the overall loss of households subscribing to packages of live linear networks by adding 368,000 customers, dropping the total of overall video subscriber losses to 1.5 million.

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AT&T drove the vast majority of the video subscriber losses during the previous quarter, both for traditional and virtual MVPDs. The company lost approximately 1.16 million premium video subscribers (DirecTV and U-verse) and lost another 195,000 AT&T TV subscribers for a total of about 1.358 million during the quarter.

In the meantime, DirecTV’s satellite peer Dish Network had a relatively upbeat quarter for subscriber growth. The company added approximately 148,000 net pay TV subscribers during the quarter as a loss of 66,000 Dish TV satellite subscribers was offset by the addition of approximately 214,000 net Sling TV subscribers.

According to Kagan, cable operators lost a combined 487,000 traditional multichannel customers, posting a 1% quarterly and a 3.1% annual decline. The telco video segment experienced its worst performance of the year, losing 192,000 subscribers to record a 1.9% quarterly and a 5.6% annual decline.

The U.S. traditional MVPD space could see even further subscriber base erosion in 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.

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