Tuesday, July 26, 2016

Pay-TV Subscriptions Continue To Drop As Cord-Cutters Do Their Thing

It’s been clear for a few years now that our model of what “TV” actually means is changing. The rise of Netflix, joined later by Hulu and Amazon, made on-demand internet-based viewing a household standard. Then PlayStation Vue, Dish Sling, and other internet-based services and networks started coming online through 2015 and 2016, while cable bills kept climbing. And all that adds up to cord-cutting speeding up and running away with the industry.

The second quarter of the year wrapped up on June 30, which means that the back half of July is chock-full of public companies’ investor reports. And for the pay-TV companies that have gone first, those reports have some dire trends.

On the fiber side, Verizon FiOS saw its first ever quarterly subscriber decline, writes the Hollywood Reporter. 41,000 subscribers gave up on their Verizon TV subscriptions this quarter, which Verizon executives blame on a nearly-seven-week long strike this spring.

“Verizon made significant progress in working through a backlog of FiOS installations in June and has since returned to its normal run rate of FiOS connection growth,” a company executive said, but that only accounts for new subscribers that couldn’t be set up during the strike — not old ones who decided to walk away.

That leaves Verizon with a total of 4.64 million TV subscribers, which continues to leave them lagging behind Comcast, the new Charter, both major satellite companies, and even smaller competitors like Cox Communications.

However, things are even less rosy over in satellite land. As Variety and others report, Dish lost a whopping 281,000 subscribers just in the second quarter.

It gets worse: Dish actually lists its traditional satellite subscribers and its Sling streaming-TV customers together. That means that growth in streaming is not even coming close to offsetting the losses from cord-cutters. In short, Dish is basically hemorrhaging subscribers.

And there may be a reason why: Dish has in recent been involved in a very high-profile string of ugly carriage disputes, at various points dumping or blacking out Tribune-owned broadcast stations, NFL Network and RedZone, Fox News, and Sinclair-owned broadcast stations, just in the last 18 months. It’s also been in a public fight with NBCUniveral (Comcast) over carriage contracts.

If you can’t actually watch the TV you’re paying for, thanks to two businesses slugging it out with the consumer in the middle, well, there’s not much point to paying. Since anyone that can use Dish can probably also switch to satellite competitor DirecTV, which has fewer blackout fights and also carries NFL Sunday Ticket, there’s not a whole lot of incentive to stay… and indeed, DirecTV (now an AT&T company) saw an increase of 342,000 subscribers in the same quarter.

The other big cable providers will be delivering their own subscriber reports soon; Comcast is scheduled for Jul. 27, and Charter for Aug. 9.


by Kate Cox via Consumerist

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