Pay TV takes its first net subscriber hit, with Dish Network leading the pack

By Steve Smith May 12, 2015

cable tv — Image used with permission by copyright holder

For the first time ever, the US pay-TV business sector dropped a net number of subscribers in the first three months of a year, during Q1 of 2015.

Cord cutters are finally getting the kind of traction they have been looking for since online video became available. The pay-TV business is shrinking at a 0.5 percent annual rate, with a net loss of 31,000 customers in Q1, according to MoffettNathanson analyst Craig Moffett. That means more people than ever are finding their TV and other entertainment on streaming sites such as Netflix, Hulu, Amazon Instant Video, YouTube and others. “Cord-cutting has finally accelerated,” Moffett wrote in a research note Monday. “It’s not too early to get worried.”

This decline comes after more than one million households decided to cancel their cable or satellite service, as well as new households that didn’t bother signing up at all. The first quarter of the fiscal year is usually a strong one for pay-TV operators, but occupied net household adds were down 407,000, according to the US Census Bureau.

Dish Network was hit the hardest, dropping 134,000 satellite-TV subs. The company blamed the blackout of Fox News Channel Dish blacks out channels again; this time it’s Fox, which it allowed back in January after an initial uproar. Dish CEO Charlie Egen said on a call with analysts that pay-TV peaked years ago, “…but it’s not declining as fast as I thought it would.” Dish launched its Web TV service Sling TV in February, aimed directly at cord cutters, but the company didn’t say how many customers signed up for the package.

Comcast shed 8,000 video subscribers, while Time Warner actually gained a net of 33,000. DirectTV, Verizon FiOS and AT&T U-verse all added subscriptions as well, so it’s not likely that the fall of pay-TV is happening any time soon.

However, the trend may be a forecast of things to come in an industry that is evolving at a rapid pace. With new choices popping up from a multitude of sources, the transition to online video has, for now at least, seemed to put consumers in the drivers seat.

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