Virtual MVPD services including Sling TV and DirecTV Now collectively added 962,000 users in the third quarter, offsetting a loss of 872,000 by traditional linear video services, MoffettNathanson analyst Craig Moffett said.
In his note to investors yesterday, Moffett predicted that vMVPD services will have 4 million users by the end of the year.
Moffett has been a staunch critic of vMVPD economics. He remarked last week, for example, about how little the $20-a-month Sling TV service has done for the bottom and top lines of its parent company, Dish Network, despite Sling’s rapid customer growth.
In his note focused on cord cutting yesterday, he also hinted at a level of cannibalization occurring in regard to the traditional ecosystem.
“We have always observed that the rate of adoption of vMVPDs was never going to be a matter of demand,” Moffett wrote. “Let’s simply stipulate that there are a lot of people who would rather pay $35 per month than $100 or more…”
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But the analyst conceded that vMVPD economics are good for someone besides budget-conscious consumers.
“For programmers, the trend for now is a favorable one; there are now more people (households?) signing up for new vMVPD subscriptions than there are people (households?) leaving traditional pay TV. Can that last?”
Moffett noted that not all programmer boats are being lifted equally. CBS Corp., Fox, NBCUniversal and Disney are in most virtual MVPD bundles. But smaller media companies like A+E Networks, Discovery Networks and Scripps Networks Interactive comprise less than half of them.
Moffett’s estimate of 862,000 lost customers in the third quarter is roughly in line with a cord-cutting tally released earlier this week by Leichtman Research Group, which pegged the loss at around 943,000.
Kagan released stats yesterday suggesting the total loss was 1.2 million users once smaller cable companies were factored in.