As the TV business realigns itself around streaming services, traditional pay-TV services continue to bleed subscribers, according to the most recent quarterly results from Leichtman Research Group.

In its latest report, LRG reported that the largest pay-TV providers in the U.S.—representing about 96% of the market—lost about 1,730,000 net video subscribers in 2Q 2023, compared to a pro forma net loss of about 1,725,000 in 2Q 2022. 

The top pay-TV providers account for about 71.9 million subscribers—with the top seven cable companies having 35.9 million video subscribers, other traditional pay-TV services having about 22.7 million subscribers, and the top Internet-delivered (vMVPD) pay-TV services having about 13.4 million subscribers, according to LRG.

Top cable providers had a net loss of about 925,000 video subscribers in 2Q 2023—compared to a loss of about 950,000 subscribers in 2Q 2022, while other traditional pay-TV services had a net loss of about 690,000 subscribers in 2Q 2023—compared to a loss of about 710,000 subscribers in 2Q 2022, LRG said. Top vMVPDs (including an estimate for YouTube TV) had a net loss of about 115,000 subscribers in 2Q 2023—compared to a loss of about 65,000 subscribers in 2Q 2022.

“Pay-TV net losses of about 1.73 million in 2Q 2023 were similar to the losses in last year’s second quarter,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.  “Over the past year, top pay-TV providers had a net loss of about 5,360,000 subscribers, compared to a net loss of about 4,235,000 over the prior year.”

WASHINGTON, D.C. & OVERLAND PARK, Kan.—With a new theme of “More than Ever” the National Content & Technology Cooperative (NCTC) and ACA Connects (ACAC) who are hosting and sponsoring the 18th annual Independent Show (TIS) on July 30–August 2 at the Minneapolis Convention Center in Minneapolis, Minnesota have unveiled an expanded program of exhibits, conferences, educational sessions, networking, family-centric fun and activities. 

“This year, we have more booths, more sessions, more opportunities to network, more fun and simply more than ever,” said Lou Borrelli, CEO of NCTC. “We have spent the past year building innovative programs allowing our members to increase their service offerings.”

In addition to offering more sessions, speakers, roundtables, exhibitors and exciting activities for the whole family than ever before, the show is designed to allow attendees to gain invaluable insights and practical advice on topics relevant to important decisions operators will face in the next five years as the video and broadband landscape today undergoes a period of rapid change. 

“The Independent Show is a major industry event, and this year’s is no exception. It is one of the highlights of our community that no one will want to miss,” said ACA Connects’ president and CEO Grant Spellmeyer. “Our program will explore key issues facing our industry, including how to meet the changing face of Congress and more effectively tell our story in state capitals and much more.”

Both Borrelli and Spellmeyer explained that the expanded offerings were developed based on feedback from members and attendees who wanted even more of what TIS has always offered.  

As usual, the event will be covering a host of hot topics for the industry, including the Mobile Virtual Network Operator (MVNO) agreement and a number of other issues. Those include advice on how members can manage their share of the Broadband Equity, Access, and Deployment (BEAD) billions, which Congress is investing across the country to increase connectivity and close the digital divide.

The show is also designed to offer family-focused fun. Monday night’s party, for example, will take place in the U.S. Bank Stadium, home of the NFL Vikings, where fans will play on the field, party in the suites and feel like an NFL pro. 

Other highlights include entertainment by Paramount comedian Orlando Leyba; a guided tour of Paisley Park, the home of music icon Prince; and an excursion to Mall of America, where attendees can visit Minnesota’s largest Aquarium featuring a 360-degree ocean tunnel, and the first indoor Nickelodeon theme park in the U.S.

TIS will feature keynote speeches from Retired Rear Admiral and Top Gun Pilot Michael Manazir; Andrew Zimmern, the James Beard Award-winning chef and TV personality who seemingly eats anything; Jason Dorsey, named by Adweek as the research guru, who will discuss how to future-proof your organization; Evan Shapiro, a renowned comedy producer known for the IFC series Portlandia; and Jasmine Roth, designer and HGTV television host.

Each year, the invitation-only event brings together NCTC and ACAC members, consisting of broadband, telco, cable, municipal and electric cooperative members from across the U.S. and Canada to hear expert speakers and panels, network with the best and brightest industry leaders, and explore the expansive vendor exhibit floor featuring the latest products and technologies that are transforming the industry.

“The industry is continually transforming, and this year’s Independent Show will provide even more resources and information to our members to utilize in their businesses, so they can also do more than ever before,” Borrelli added. “With dynamic speakers and informative panels, as well as exciting events and activities, Minneapolis will surprise you with all it has to offer!”

TIS is expected to bring together more than a 1,000 NCTC and ACAC members and exhibitors.  

More information is available here. 

SAN JOSE, Calif.—Cox Communications has entered into a long-term extension of its license of the media portfolio from Adeia, an R&D and intellectual property licensing company.

The portfolio includes technology to enhance the experience of viewers subscribing to the pay TV operator’s service.

Adeia has spent decades investing in advanced research and development to create technologies for the media and entertainment industry. Its solutions touch practically every aspect of consumers' day-to-day interaction with their entertainment, the licensing company said.

More information is available on the company’s website.

DURHAM, NH—Cord-cutting hit an all time high in the first quarter of 2023, with the largest pay TV providers in the U.S.—representing about 96% of the market—losing about 2,215,000 net video subscribers, compared to a pro forma net loss of about 1,850,000 in the same period a year ago, a decline of more than 16%, according to Leichtman Research Group.

But the loss wasn’t restricted to just traditional pay-TV; virtual multichannel program distributors such as Hulu Plus Live TV and Sling TV also lost subscribers as well. As a whole, vMVPDs lost 394,000 subscribers in Q1; the only service to gain subscribers was YouTube TV, which added approximately 100,000 during a quarter when it announced an $8 rate increase that went into effect in April.  

The top pay-TV providers account for about 73.7 million subscribers—with the top seven cable companies having about 36.8 million video subscribers, other traditional pay-TV services having 23.4 million subscribers, and the top Internet-delivered (vMVPD) pay-TV services (now including an estimate for YouTube TV) having about 13.5 million subscribers.

Key findings for the quarter include:

• Top cable providers had a net loss of about 1,060,000 video subscribers in 1Q 2023 – compared to a loss of about 825,000 subscribers in 1Q 2022;
• Other traditional pay-TV services had a net loss of about 760,000 subscribers in 1Q 2023 – compared to a loss of about 625,000 subscribers in 1Q 2022, and
• Top vMVPDs had a net loss of about 395,000 subscribers in 1Q 2023 – compared to a loss of about 400,000 subscribers in 1Q 2022

“Pay-TV net losses of about 2.2 million in 1Q 2023 were more than in any previous quarter,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.  “Similar to recent quarters, the record net losses appear to be as much a function of a slowdown in new connects as an increase in disconnects.”

The numbers match a similar report from MoffetNathanson released last week that noted total pay-TV penetration of U.S. households (including vMVPDs) has dropped to 58.5%, its lowest in 31 years.

The report comes a day after LRG reported that broadband providers added about 960,000 subscribers in Q1, however that comes as little comfort to the pay-TV providers whose broadband business is taking up the slack from the loss of video customers. Most of the additional broadband subscribers during the quarter were for the fast-growing fixed wireless 5G market dominated by T-Mobile.

AMSTERDAM—The cybersecurity provider Irdeto has launched a new and improved ActiveCloak for Media (ACM), a software digital rights management (DRM) software development kit (SDK). The enhanced solution includes multiple layers of security that are designed to ensure content encryption keys cannot be illegally extracted from devices, the company reported. 

“With the relaunch of Irdeto ACM, we are listening and responding to our customers’ needs,” said Andrew Bunten, Irdeto’s new chief operating officer for video entertainment. “Irdeto ACM is a much-needed solution to address one of the biggest sources of piracy today, and we add another tool to our arsenal of anti-piracy services. Video service providers can pick and choose to meet a specific need or go for a broader solution set for “lens to screen” protection in their fight against piracy.”

Content key extraction is the biggest piracy issue facing video streaming services and pay-TV operators, the company said. 

This is because many devices in use today lack hardware DRM protection and rely solely on its operating system software DRM, making them highly vulnerable to content key extraction. With content encryption keys in hand, pirates can create a host of problems, including the delivery of illegal services leading to missed revenue opportunities and increased CDN costs, Irdeto said. 

Irdeto said that its ACM helps to avoid the reputational and operational impact by protecting the video applications themselves instead of relying on the device’s operating system DRM to secure the content on vulnerable devices. With Irdeto ACM, the content decryption will bypass the device’s operating system software DRM, taking place inside the video application itself instead, the company said. 

Unlike proprietary DRM-based solutions in the market, Irdeto ACM works with any DRM server vendor, which eliminates costly custom integrations. Its renewable security provides increased agility to deploy fast and respond efficiently to piracy attacks. It protects against pervasive threats to software security, including reverse engineering, software tampering, copying/cloning, and automated attacks while safely encrypting and decrypting data and communications, the company said. 

More information is available here. 

CAMBRIDGE, U.K.—Strong consumer interest in the FIFA World Cup Qatar 2022 is driving what Velocix is calling “unprecedented” traffic demand on pay TV networks in various parts of the world. 

Velocix supplies managed services for video service provider based content delivery networks (CDNs) and it has used that infrastructure to track the video traffic peaks in countries around the world as fans watch the football tournament in Qatar.

Velocix’s managed services team has recorded the largest viewing increases in Latin America, with pay TV operators’ peak traffic levels rising by as much as 140% in some countries. 

In Europe, the peak traffic increases have also been impressive, with video service providers experiencing surges of up to 82%. 

In North America, where soccer has a much lower profile, modest increases in peak traffic have been recorded of around 20%, Velocix reported. 

“Velocix has been working closely with many of the world’s largest pay TV providers over several months to prepare their content delivery networks for the upswell in viewership caused by the FIFA World Cup,” explained Marco Rico, vice president of maintenance and managed services at Velocix said. "This detailed capacity planning and network optimization ensures consumers are able to enjoy the highest quality viewing experience, even as network traffic reaches record levels.”

“As the competition progresses through to the final, we are expecting even higher streaming traffic peaks,” he added. “Over the coming days, we will be monitoring video networks as they come under greater pressure and will fine tune the CDNs as needed to deliver the best performance to sports fans around the world.” 

DURHAM, N.H.—The biggest U.S. pay-TV providers together lost about 785,000 subscribers in the third quarter, an increase in the loss from Q3 2021 when 650,000 households dropped their subscription, according to Leichtman Research Group (LRG).

These top providers, which represent about 92% of the market, now account for 71.4 million subscribers. Of those, the top seven cable companies have about 38.6 million video subscribers. Other pay-TV services have about 24.8 million subscribers, and the top publicly reporting internet-delivered pay-TV services have more than 8 million, the research organization said.

Other Leichtman findings:

• The top cable providers had a net loss of 980,000 video subscribers in Q3 2022 compared to a decline of 700,000 from the same quarter last year.
• Other traditional pay-TV services had a net loss of about 700,000 for the quarter, a drop of 70,000 more subscribers compared to Q3 2021.
• The top publicly reporting vMVPDs added about 900,000 in the quarter, up 220,000 from the same quarter last year.

“Spurred by a strong quarter from internet-delivered vMVPD services, pay-TV net losses of about 785,000 in 3Q 2022 were more modest than in the first two quarters of the year,” said Bruce Leichtman, LRG president and principal analyst. “Not including YouTube TV, which does not regularly report subscriber totals, vMVPDs had nearly 900,000 net additions in the quarter. This was the third most quarterly net adds ever for the top publicly reporting vMVPD services.”

More information is available on the research group’s website. 

TROY, Mich.—J.D. Power has released its annual consumer survey of consumer satisfaction with TV service providers and for the fifth year in a row, Dish received the highest consumer satisfaction rank among nationwide cable and satellite providers. 

Dish also had the highest customer satisfaction scores in the South and in the West. 

In the survey, FuboTV ranked highest in the live TV streaming segment with a score of 789 on a scale of 1,000. Sling TV (786) ranked second and YouTube TV (779) ranked third.

The J.D. Power 2022 U.S. Television Service Provider Satisfaction Study also found that consumer satisfaction with virtual pay TV providers like FuboTV and Sling TV was higher than cable and satellite service. The live TV streamers had an overall satisfaction of 775 versus 699 for cable and satellite. 

The study found that live television streamers say they pay less for their live television, as the self-reported average cost for cable and satellite television is $110 per month and the average cost for streaming is $68 per month. Among both groups, the biggest driver for choosing a television provider is a lower price, the survey found. 

“Delivering video to myriad devices both in-home and mobile is actually pretty difficult and yet the service providers in cable, satellite and streaming all make it look easy, creating ever higher customer expectations,” said Ian Greenblatt, managing director at J.D. Power. “Highest quality content is quite costly to produce or acquire for all providers. Operating the needed networks and equipment for cable and satellite TV from start to finish versus streamers who can use those networks for middle and last-mile delivery for hundreds of thousands of concurrent streams, are vastly different at a product level regarding cost.  Live TV streamers (and their customers) are therefore the beneficiaries of the imbalance and can be seen as providing more value for the subscription dollars spent.”

Specific segment results include: 

• The survey found that Dish ranked highest in the cable/satellite TV–national segment for a fifth consecutive year, with a score of 720. Xfinity (706) ranked second and DirecTV (699) ranked third.
• Verizon Fios ranked highest in the cable/satellite TV–east region with a score of 749. Dish (713) ranked second and Xfinity (699) ranked third.
• Midco ranked highest in the cable/satellite TV–north central region with a score of 721. Xfinity ranked second with a score of 701 and Dish ranked third with a score of 699.
• Dish ranked highest in the cable/satellite TV–south region with a score of 736. Xfinity ranked second (719) and DirecTV ranked third (710).
• Dish ranked highest in the cable/satellite TV– west region with a score of 716, followed by Xfinity (705).
• FuboTV ranked highest in the live TV streaming segment with a score of 789. Sling TV (786) ranked second and YouTube TV (779) ranked third.

To be included in the national cable/satellite TV ranking, brands must be ranked in all four geographic regions. The study is based on responses from 23,387 customers and was fielded from November 2021 through August 2022.

BOSTON, Mass.—While live linear TV viewing continues to decline, a new study from the Hub is reporting that across the entire TV viewer base, live TV from a traditional pay TV service remains the most common first stop for viewing. 

Hub’s annual “Decoding the Default” study, which tracks the TV source that consumers turn on first when they’re ready to watch, found that 28% of respondents say that linear channels from a cable, satellite, or telco TV subscription is their TV home base. Netflix is a close second, at 23%, while no other individual source reaches double digits.

Nearly two in five (39%) respondents, however, reported that they started viewing at one of the top six streaming services, the study found.   

Only 5% started with an over-the-air broadcast service, about the same as the 5% who started with a virtual MVPD. 

But the researchers stressed that live TV has been dropping steadily as a default source over the past seven years, and is at its lowest point they began measuring default sources. Netflix reached a saturation point as a default in 2018 (23%) and has been fluctuating around that level ever since.

In contrast, the other “Big 5” streaming subscription services have made more consistent gains. While no single service in this group comes close to Netflix, in combination they’re now just 7 points behind.

The study also found that the declines in linear from traditional pay are not significantly improved when one adds in linear from Virtual MVPDs. If anything, adding in live from VMVPD shows an even more pronounced decline for live TV in general as the first stop for TV. The percent turning first to VMVPD has not risen above 6% since we started measuring defaults.

Overall, the percent defaulting to any live TV subscription is only 32% in 2022, 3 points lower than in 2021 and 7 points lower than in 2019.

The study also found that the choice of a default starting point for viewing is dramatically different by age.

Among 18-34 year olds, 38% make Netflix their first viewing choice—more than 3 times the proportion who default to a traditional live source.

On the other hand, half (50%) of 55+ year-olds turn first to pay TV linear channels, more than 5 times the percent who make Netflix their first viewing stop.

Although live from traditional TV still hangs on to a slim lead as the top individual default source, online sources in general dominate traditional pay TV sources in general, the researcher wrote. 

And that dominance has increased since even last year: 57% make an online source their TV home (up from 55%) last year, while 38% default to a source from a pay TV set-top box: live, DVR, or VOD (down from 39%).

 The small proportion of 18-34 year olds, and the large proportion of 55+ year olds, who default to some live source hasn’t changed since last year. But 35-54 year olds are now 7 points less likely to default to live, the report found.

The proportion defaulting to Netflix has not changed among 35-54 or 55+ year olds. But after dipping between 2020 and 2021, Netflix is up 7 points as a default among 18-34 year olds.

The drop for live among 35-54 year olds comes with an increase of 4 points defaulting to a Big 5 SVOD other than Netflix among this age group, Hub found. 

 The survey also found that being a default service is important because those who default to a service are dramatically more likely to remain loyal to it.

As part of the survey, Hub asked consumers to select which of the TV services they currently have they would keep if they had to drop all services except one. Among all subscribers to traditional pay TV service or each of the Big 5 SVODs, anywhere from 8% to 37% name each as the service they’d hang on to if they had to drop all others.

But among those who default to each of those services, the percent saying it would be the one service they’d keep jumps dramatically, to anywhere from 59% to 65%.

“At a time when the typical TV consumer uses an average of 7.4 different sources of TV content (Hub, The Best Bundle, 2022), simple penetration of a service in the marketplace is no longer a reliable measure of long term service success,” said Peter Fondulas, principal at Hub and co-author of the report. “A much better predictor is how much consumers engage with each service they have—and in particular, which they consider their TV viewing home base.”

The data cited here come from Hub’s “Decoding the Default” study, conducted among 1,600 US consumers with broadband, age 16-74, who watch at least 1 hour of TV per week. The data was collected in August 2022.

BOSTON—Altman Solon’s 12th annual Consumer Video Survey is reporting that the proliferation of new streaming services continues to disrupt the traditional pay TV market, as U.S. streaming subscriptions have increased at 37.4% per year from 2014 to 2020 and the number of  streaming services subscriptions per household jumped from 2.1 in 2020 to 3.0 in 2021.

The growth in streaming subscriptions comes as pay TV subscription rates continue to decline, the global strategy consulting firm Altman Solon reported. Almost half of the respondents (48%) cited that they subscribe to pay TV because ‘they are used to it,’ while more than one third (34%) of those surveyed have Pay TV as part of their household broadband package. On the other hand, price and convenience are driving digital Pay TV adoption for 62% and 42% of the respondents respectively, the survey found.

Based on simulations of future behavior, more losses are likely Altman Solon is predicting.

This year, Altman Solon's Consumer Video Survey added a new tool to better understand trends in potential consumer adoption of TV and streaming services over time by examining five different hypothetical scenarios of streaming services offering live news and sports programming.

Simulations run through the tool reveal that as increasing amounts of content, once exclusive to live Pay TV, is made available on streaming services, consumers start finding streaming services more attractive than Pay TV. Under the simulations, Pay TV penetration is expected to drop by 15.6 percentage points (from 69.3% to 53.7%).

“Live sports and news continue to attract viewers’ attention and drive the growth or decline of Pay TV and streaming services,” said Matt Rivet, partner at Altman Solon. “U.S. viewers are steadily moving away from pay TV to streaming services, especially as more content becomes available, but consumer confusion among streaming services and a familiar experience with pay TV are primary drivers to pay TV retention. MVPDs need to re-define their value proposition to retain subscribers as content availability and value for money will ultimately decide the winners and losers in the race for subscribership.” 

Other key findings of the simulation include:

• Live sports is a large driver for Pay TV retention, with more than 8 out of 10 monthly sports viewers (83%) subscribing to live Pay TV.
• As more content comes online, consumers will move to streaming services like Peacock and Paramount+, which are owned by major programmers, NBC and CBS respectively.
• Overall, shifting consumer spending towards cheaper streaming services projects a decrease of over $5.00 in monthly household spending on streaming and Pay TV services.
• Traditional Pay TV is likely to remain popular, despite most live content being made available on streaming services, with Pay TV spend estimated to decrease by $8 monthly (from $38 today to $30 in phase 5).
• Households ‘cutting the cord’ across each phase are estimated to slightly increase their total streaming spending as they adopt new streaming services (from $21 to $25). 

Altman Solon’s twelfth annual Consumer Video Survey is based on 5,066 U.S. respondents.

DURHAM, N.H.—The largest pay TV providers continue to hemorrhage video subscribers, losing about 1,955,000 net video subscribers in Q1 2022, compared to a pro forma net loss of 1,910,000 in Q1 2021, and 1,960,000 in Q1 2020, according to a new study from the Leichtman Research Group (LRG).

The largest pay TV providers in the U.S.—representing about 93% of the market—now account for about 74.1 million subscribers. The top seven cable companies have about 40.5 million video subscribers, other traditional pay TV services have 26.2 million subscribers, and the top publicly reporting Internet-delivered (vMVPD) pay TV services have about 7.4 million subscribers, LRG reported. 

“Pay TV net losses of about 1.95 million in 1Q 2022 were similar to the net losses in the first quarters of 2021 and 2020,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.  “Over the past year, top pay TV providers had a net loss of about 4,735,000 subscribers, similar to a loss of about 4,820,000 over the prior year.”

Other key findings for the quarter include:

• Top cable providers had a net loss of about 825,000 video subscribers in Q1 2022 – compared to a loss of about 780,000 subscribers in Q1 2021.
• Other traditional pay TV services had a net loss of about 625,000 subscribers in Q1 2022 – compared to a loss of about 865,000 subscribers in Q1 2021.
• Top publicly reporting vMVPDs had a net loss of about 505,000 subscribers in Q1 2022 – compared to a loss of about 265,000 subscribers in Q1 2021.

The report found that Comcast is the largest pay TV provider with 17.66 million video subs (down 512,000 in Q1, 2022), followed by Charter (down 112,000 subs to 15.72 million), DirecTV (down 300,000 to 14.3 million), Dish TV (down 228,000 to 7.99 million), Hulu + Live TV (down 200,000 to 4.1 million), Verizon FiOS (down 78,000 to 3.57 million), Cox (down 80,000 to 3.31 million),  and Altice (down 73,600 to 2.66 million). 

For more information about LRG, call (603) 397-5400 or visit www.LeichtmanResearch.com.

LONDON—A new report for Digital TV Research is forecasting 19 million more pay TV subscribers across 138 countries between 2021 and 2027, but revenues will decline by $25 billion over the same period, as cord cutting in the richer countries with higher sub fees will reduce average revenue per subscriber (ARPU).

Simon Murray, principal analyst at Digital TV Research, explained that “between 2021 and 2027, 86 countries will add pay TV subs and 52 countries will lose subscribers. Most of the countries gaining pay TV subscribers are developing nations, with low ARPUs. The U.S. will be the biggest loser – down by 12 million subscribers.”

The report is also predicting that IPTV will add 79 million subscribers globally between 2021 and 2027 to take its total to 439 million. Satellite TV will lose 10 million subscribers between 2021 and 2027. 

Revenues will decline in 70 of the 138 countries between 2021 and 2027. The U.S. will fall by $19 billion. Global satellite TV revenues will drop by $14 billion, with digital cable down by $10 billion. Analog cable will lose $1 billion. IPTV will grow slightly. 

For more information on the Global Pay TV Forecasts report, please contact: Simon Murray, simon@digitaltvresearch.com, Tel: +44 20 8248 5051 

LONDON—A new forecast from Digital TV Research is predicting that pay TV sub losses will be lower in the next five years than they have been in recent years. But that pay TV penetration will still drop below 50% in 2026 and that pay TV subs will fall to about 60 million in 2027. 

That marks a huge decline from 2010, when pay TV penetration stood at 91% and there were 105 million pay TV subs, and a significant decline from 2021, when pay TV penetration was about 60%. 

It also highlights a huge financial loss for operators. The report noted that pay TV revenues peaked in 2014, at $101 billion. A $48 billion decline is forecast between 2014 and 2027; halving the total to $53 billion.

The author of the report, Simon Murray, principal analyst at Digital TV Research, explained that  “The U.S. lost 6 million pay TV subscribers each year from 2019 to 2021. Losses will decrease from now on, but the 2027 total will be 12 million lower than 2021.”

The number of households without a pay TV subscription will rocket from 11.34 million in 2010 to 72.86 million in 2027 due mainly to cord-cutting.

For more information on the “North America Pay TV Forecasts” report, contact: Simon Murray, at simon@digitaltvresearch.com.

NEW YORK—In Q3, 2021, traditional cable, telco and satellite video sub losses rose to nearly 1.7 million compared to a year earlier but virtual subscriptions broke out of the doldrums to increase by almost 1.4 million, according to new estimates for total U.S. residential and commercial video subs from Kagan, the media research unit of S&P Global Market Intelligence.

That is helping smooth the losses for multichannel TV providers, Kagan said. 

It reported that the penetration of traditional multichannel TV services in the U.S. fell to only 52.7% in Q3. But when the subs to newer virtual multichannel video packages like Sling TV are included, the penetration rate is much higher, about 63.9% in Q3. 

When the virtual packages were included in the multichannel sub totals, Kagan reported that “the combined total customers with a subscription to a package of live linear networks dropped by an estimated 282,000, while virtual multichannel packages repeated evidence of third-quarter popularity with the return of football and other live sports.”

But Kagan also noted that penetration rates of the “traditional services are slipping toward the symbolic 50% mark. Estimated traditional residential multichannel subscriptions slipped below 68.6 million, accounting for less than 53% of occupied households. The combined virtual and traditional multichannel households accounted for less than 64% of occupied households at 83.2 million residential subscriptions.”

NEW YORK—As fiber adoption accelerates globally and consumers increasingly turn to alternative forms of entertainment online, multichannel operators, particularly telcos, are beginning to reconsider their video strategies, reports Kagan, the media research unit of S&P Global Market Intelligence, in a new blog post on global multichannel TV.

Kagan is predicting that multichannel households will reach a total of 1.10 billion by the end of 2021, a very weak 0.5% year-over-year increase, as subscriber gains in emerging markets barely make up for accelerated cord cutting in North America, Western Europe and advanced markets in Asia-Pacific. 

Video services, meanwhile, will generate $191.18 billion in revenues by the end of 2021, a 3.5% drop compared to 2020, thanks to declining annual video service revenues per user in North America.

Kagan also expects this trend to continue, with global video service revenues declining at a negative 2.4% CAGR from 2020 to 2025 due to rapid pay TV household losses in the U.S. and Canada. By 2025, video services revenue should drop to $175.6 billion, down from $198.1 billion in 2020. 

However, Kapan is predicting that video service revenues will continue growing in other global regions, with Eastern Europe posting the highest CAGR in that time period at 3.9%.

Those trends, Kagan argues, are convincing “a growing number of operators” to shut down traditional services and migrate customers to own- or third-party virtual multichannel or other streaming services.

As a result, multichannel penetration of TV households is expected to decline to 58.8% by end-2021 down from a peak of 60.6% in 2018, and continuing to decline to 56.6% by 2025.

Despite the expected multichannel penetration decline worldwide, the global number of pay TV subscribers will continue to grow in the next five to 10 years, Kagan said, with all regions except North America experiencing growth. 

Kagan’s researchers are estimating that there will be nearly 1.15 billion homes worldwide with a pay TV subscription by the end of 2025.

Although cable remains the largest pay TV platform on a global scale, accounting for slightly over half of the total multichannel homes in 2021, its market share and the number of subscribers are expected to continue declining in the next five years, with subscriber losses concentrated in North America, Western Europe and Asia.

In 2020, IPTV overtook DTH to become the second-largest multichannel platform worldwide, with an estimated 284.1 million subscribers at the year's end. IPTV is forecast to grow globally as well as in every region except North America, accounting for 28.9% of global pay TV homes by 2025. The DTH segment, meanwhile, will stagnate on the global scale and decline in the Americas and Western Europe, Kagan said. 

Mainland China, India and the U.S. have remained the largest multichannel markets by far, which should collectively claim 56.8% of the global subscriber total by the end of 2021. China and India alone claim just over half of the global market, Kagan said.

DURHAM, N.H.—New consumer research from the Leichtman Research Group is reporting ongoing drops in pay TV penetration, with only 71% of TV households nationwide having some form of pay-TV service in 2021. 

That marks a significant five year decline from the 82% penetration rate in 2016 and an even bigger 10 year decline from 87% in 2011. 

The declines were even worse among younger demos. In 2021 among TV households, 64% of adults aged 18-44 and 77% of those older than 45 had a pay-TV service; in contrast 77% of adults ages 18-44 and 86% of ages 45+ had a pay-TV service in 2016. 

This has also resulted in a massive change in the way video is delivered into TVs in the home. The Leichtman survey found that 37% of all TV sets in use have a traditional pay-TV providers’ set-top box – compared to 58% in 2016

“The percent of U.S. TV households with a live pay-TV service significantly declined from 82% to 71% over the past five years,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.  “The penetration of pay-TV remains lowest among younger adults and the categories that they tend to populate, including movers and renters.” 

The new report also found that:  

• 41% of those that moved in the past year do not currently have a pay-TV service – a higher level than in previous years.
• 35% of renters do not have a pay-TV service – compared to 25% of homeowners.
• 30% of pay-TV non-subscribers last had a pay-TV service within the past 3 years, 36% last had a pay-TV service >3 years ago, and 34% never had a pay-TV service.
• 54% of pay-TV non-subscribers that never had a service are ages 18-34 – while 28% of non-subscribers that formerly had pay-TV are in that age range.
• 26% of adults agree that it is OK to use a friend’s log-in passwords to watch live TV, including 40% of ages 18-34.

These findings are part of a new LRG study, “Pay-TV in the U.S. 2021.”  

“Pay-TV in the U.S. 2021” is based on a survey of 2,000 adults aged 18+ from throughout the U.S.  The random sample of respondents was distributed and weighted to best reflect the demographic and geographic make-up of the U.S.  The survey, conducted in September-October 2021, included a sample of about 1,200 online and about 800 via telephone (including landline and cell phone calls).  The overall sample has a statistical margin of error of +/- 2.2%.  The online sample used exclusively for some questions has a statistical margin of error of +/- 2.8%.

More information about the report is available at www.LeichtmanResearch.com.

NEW YORK—Video cord cutting and the migration of consumers to streaming video services will significantly reduce revenue for pay TV operators over the next few years, according to Kagan, the TMT research unit of S&P Global Market Intelligence. 

It’s latest forecast for cable, direct broadcast satellite and telco multichannel revenue predicts that their sales will dip from $91.1 billion in 2021 to $64.7 billion by 2025, producing nearly $33.6 billion in lost annual revenue that operators will have to recover from other sources. 

In a longer term perspective, Kagan’s data shows that multichannel video revenues hit a peak of $116.9 billion in 2016, which would mean the industry will have lost nearly half (45%) of its annual revenue by 2025. 

While all three major platforms are feeling the impact from the shift, “the magnitude of the losses are expected to hit more acutely for DBS and telco revenue subtotals amid waning commitments by major players and relative stability from the large cable providers,” the report said. 

More information on the report is available here. 

TROY, Mich.—The new customer satisfaction survey of pay TV providers from J.D. Power highlights the importance of streaming services in the overall consumer experience and provides some interesting data bolstering the increasingly widespread pay TV strategy of bundling streaming services with traditional pay TV offerings.  

The report found that satisfaction with the cost of service among residential television customers who also have a streaming service is 81 points higher (on a 1,000-point scale) than among those who do not have a streaming service, reinforcing the idea that operators should be making streaming services easily accessible on their user interface.  

The report also found evidence that customers are still finding value in the pay TV video subscription. Among customers who have a streaming service and typical cable TV, 91% told J.D. Power that they will not be dropping their TV service in the next 12 months, a stat that indicates those customers have not found all of what they are looking for outside of the traditional pay TV landscape, the report noted. 

“The use of streaming services not only provides a more cost effective way to watch television, it also provides the ability to stream personalized and live content anytime, anywhere,” said Ian Greenblatt, managing director at J.D. Power. “Customers with highly satisfying streaming experiences will continue to seek increased convenience, personalization and relevant content elsewhere if not delivered by traditional television providers.”

In terms of national rankings, Dish was the highest with 751 out of a possible 1,000, followed by DirecTV (731), Comcast’s Xfinity (723) and Charter’s Spectrum (702). The industry average was 721. 

In the “East Region” Verizon was first with 750, followed by Dish (747), DirecTV (742).

Dish ranked highest in the North Central segment with a score of 746, followed by AT&T (735) and Xfinity (717).

AT&T ranked highest in the South segment with a score of 762, followed by Dish (760) and DirecTV (742).

Dish ranked highest in the West segment with a score of 744, followed by AT&T (734) and DirectTV (721).

The full rankings for individual operators are in the graphics below the article. 

The 2021 U.S. Residential Television Service Provider Satisfaction Study is based on responses from 21,555 customers who currently have television service with a provider included in the study. The study measures overall satisfaction with television service providers based on seven factors: Performance and Reliability; Cost of Service; Programming; Communications and Promotions; Billing and Payment; Features and Functionality; and Customer Service. The study was fielded from October 2020 through July 2021.

SAN FRANCISCO—Despite cord cutting and the rapid growth of streaming video services, the global pay TV market size is expected to see slight 1.7% a year growth between now and 2028, when the global pay TV market will hit $265.44 billion by 2028, according to a new report by Grand View Research.

The fastest growth will occur in the IPTV segment, with a CAGR of more than 8%, thanks to the spread of 5G technologies, followed by the satellite TV segment. 

The Asia Pacific region is expected to emerge as the fastest-growing regional market due to comparatively lower internet rates and tech upgrades, the "Pay TV Market Size, Share & Trends Analysis Report" by Grand View Research noted. 

The researchers note that “rising competition from OTT media providers is promoting pay TV operators to disrupt existing business models and strategize more efficient profit generation methodologies. Additionally, emerging players, such as MOBITV, offer customized, cost-effective, and flexible options to their customers according to their demands, thus ensuring customer satisfaction. This is expected to promote new and existing players to diversify their existing service offerings and ensure healthy competition in the market.”

DURHAM, N.H.—Pay-TV providers appear to be holding their own when it comes to losing subscribers, according to the latest report from Leichtman Research Group. LRG found that the largest pay-TV providers in the U.S—representing about 95% of the market—lost about 1,230,000 net video subscribers in 2Q 2021, compared to a pro forma net loss of about 1,505,000 in 2Q 2020. 

The top pay-TV providers now account for about 77.6 million subscribers—with the top seven cable companies having 42.6 million video subscribers, other traditional pay-TV services having about 28.2 million subscribers, and the top publicly reporting Internet-delivered (vMVPD) pay-TV services having about 6.8 million subscribers.

LRG reports that the top U.S. cable providers had a net loss of about 590,000 video subscribers in 2Q 2021, compared to a loss of about 505,000 subscribers in 2Q 2020 and that other traditional pay-TV services had a net loss of about 700,000 subscribers in 2Q 2021, compared to a loss of about 1,045,000 subscribers in 2Q 2020.

Among those services, AT&T Premium TV had 473,000 net losses in 2Q 2021, compared to 887,000 net losses in 2Q 2020. Top publicly reporting vMVPDs (i.e., YouTube TV, Sling TV and Hulu), added about 55,000 subscribers in 2Q 2021—compared to a gain of about 45,000 subscribers in 2Q 2020

“Pay-TV net losses of 1,230,000 in 2Q 2021 were about 275,000 fewer than in 2Q 2020 on a pro forma basis,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.  “Over the past year, top pay-TV providers had a net loss of about 4,520,000 subscribers, compared to a loss of about 5,460,000 over the prior year.”

ADDISON, Texas—A new research report from Parks Associates highlights just how costly the rise of OTT and streaming media has been to the TV industry, with US pay TV operators losing 18 million subs between 2014 and 2020. 

In 2020 alone, over seven million homes dropped their pay TV services, Parks noted. 

The industry report "Modern Broadband: Shifting Landscape” also predicts that traditional pay TV subs will continue to decline, slumping to about 54 million by 2024. 

The declines have reduced income from carriage fees and retransmission consent deals, trends that have further accelerated the move to streaming media by programmers and broadcasters. 

The shift has also boosted sub counts for virtual MVPDs, though these increases have not kept pace with losses in traditional subs. 

“Online pay TV service from virtual MVPDs, players that target the general population instead of offering services to a specific geographic footprint, grew by an estimated three million,” said Kristen Hanich, senior analyst at Parks Associates. “vMVPDs overall have grown to represent an increasingly large percentage of the pay TV market — accounting for 16% of US pay TV subscriptions in 2020.”

In the US market, vMVPDs represented the only segment of the pay TV space to experience growth during the COVID-19 pandemic. Parks Associates estimates that by the year 2024, the traditional pay TV subscriber base will decline to just 53 million US households — while vMVPDs will increase to over 23 million.

Internet service providers and others operating in the pay TV space have been seeking alternatives to traditional pay TV in their consumer services arsenal, the research company reported. 

Cable operators in the United States have had some success in encouraging new bundling by launching Wi-Fi-first MVNO services, primarily running on Verizon’s network. In Parks Associates’ Q1 2021 survey, 4% of US broadband households reported subscribing to Comcast Xfinity Mobile, Spectrum Mobile, or Altice Mobile — making them some of the largest players in the MVNO space.

“US ISPs collectively have over 110 million residential and small business internet subscriptions as of Q1 2021,” Hanich said. “The standalone broadband market will continue to grow, increasing pressure on these service providers to find the next combination of services that best leverages this massive subscriber base.”

HARROW, U.K.—A new report finds that the global pay TV business is fragmenting with the top 50 pay TV operators serving about 62% of the world’s 1.02 billion pay TV subs in 2026, down from 64% in the middle of 2020, according to Digital TV Research. 

Its new "Global Pay TV Operator Forecasts" is predicting that the top 10 global operators will lose about 11 million subs over that five year period, dropping to 412 million in 2026 and the top 50 operators will lose about 20 million, declining to about 627 million in 2026.

In contrast, the report predicts that the operators outside the top 100 will gain subs. 

Simon Murray, principal analyst at Digital TV Research, noted that “most industries consolidate as they mature. The pay TV sector is doing the opposite – fragmenting. Most of the subscriber growth will take place in developing countries where operators are not controlled by larger corporations.”

By the end of 2020, 13 operators had more than 10 million pay TV subscribers. China and India will continue to dominate the top pay TV operator rankings, partly as their subscriber bases climb but also due to the US operators losing subscribers, the report noted. 

Between 2020 and 2026, 307 of the 503 operators (61%) will gain subscribers, with 13 showing no change and 183 losing subscribers (36%). 

In 2020, 28 pay TV operators earned more than $1 billion in revenues, but this will drop to 24 operators by 2026, the report also predicated. 

The  "Global Pay TV Operator Forecasts" report covers 503 operators on 726 platforms (132 digital cable, 116 analog cable, 279 satellite, 142 IPTV and 57 DTT) across 135 countries. 

About 18% of U.S. broadband households canceled a over-the-top video service, a rate that has held steady over the past three years, according to research from Parks Associates.

OTT video subscriptions are relatively new compared to traditional pay-TV and while they are growing quickly, data about churn rates is still emerging.

Parks says that the average subscription length for OTT video services is 30 months, with the top services, Netflix, Amazon Prime and Hulu, having more stability.

Churn is important because video service spend a lot to add subscribers and holding onto these mostly young consumers pays off financially.

"With OTT service penetration starting to plateau at around 65% adoption among U.S. broadband households, the OTT video market is reaching a level of saturation for the services currently available to consumers," said Hunter Sappington, a research analyst at Parks Associates. "In an increasingly crowded and competitive marketplace where subscriber acquisition costs are high, this plateau highlights the need for services to focus on retention rather than solely acquisition. Successful services can encourage retention in several ways, such as community building, continuously offering new and fresh content, and improving their user experience."

Parks says that more than 85% of U.S. millennials currently subscribe to at least one OTT video service.

The firm estimates that by 2022, more than 265 million households worldwide will have more than 400 million OTT video service subscriptions.

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SEATTLE – White-label video publishing company thePlatform has announced the cloud-based Unified Ingest Service to centrally manage all video and related metadata files is now available for operators who want to publish to subscribers’ set-top boxes and other IP-connected devices.

The Unified Ingest Service is a streamlined system that manages direct feeds from satellite transmissions, traditional video pumps, operator-owned content delivery networks and external CDNS for online video sources. It also provides centralized back-end resources to package, promote and sell video services.

It can ingest both video files and metadata. For video files, the system supports the industry’s shift to terrestrial delivery and on receiving one HD mezzanine file for both traditional cable delivery and IP delivery; provides advanced workflows to get files into formats needed for legacy STBs, next-gen STBs, game consoles, tablets, smartphones and more; and works with thePlatform’s mpx Accelerate service.

Metadata ingest centralizes and normalizes metadata from multiple soruces, including TV listings and program descriptions from metatdata providers like Rovi, Gracenote and Red Bee; episode and movie descriptions from both TV VOD Asset Distribution Interface ingest and online video sources; and complete cast and crew lists from IMDB or directly from networks and studios.

The Unified Ingest Service is available as a standalone service for pay TV operators, or as part of a broader suite of video publishing services from thePlatform’s mpx system.