Whether pay-TV subscriptions can survive long term in a world of streaming services and digital video entertainment has been up for debate in recent years, and while there still isn’t a definitive answer, new research paints a dark picture for cable companies. Leichtman Research Group has released a report finding that not only did the 10 of the 11 largest pay-TV providers in the U.S. lose subscribers in Q2 2016, the losses substantially increased compared to the year before.
Given that the 11 largest cable companies represent 95 percent of the market, the numbers are telling. The report shows that overall, the companies, lost 665,000 net video subscribers in Q2 2016; the number far exceeds Q2 2015’s net loss of 545,000 subscribers. While Q2 is historically bad for cable companies, according to Ars Technica, this year was a particularly bad one. Only DirecTV saw net gains, adding 342,000 subscribers.
Interestingly, the picture was not quite as bleak for the top six cable companies as it was for the group overall; their losses actually decreased compared to Q2 2015, dropping from 340,000 lost subscribers to 225,000. The quarter may have been bad for the market overall, but it was actually the best in terms of losses since 2006 for the top six companies.
Nonetheless, there is still plenty to give cable companies pause. “Over the past year, the top pay-TV providers (including Dish’s Sling TV) lost about 705,000 subscribers — compared to a loss of about 380,000 over the prior year,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, in a press release.
The top 11 companies do have a subscriber based of 93.75 million, so 705,000 subscribers is a relatively small percentage, but the fact that losses have increased overall is notable. Although the report didn’t point to a cause, it seems likely that the emergence of digital alternatives has played a role. Pay-TV subscriptions may not be on the brink of extinction, but cable companies will have to continue to adapt to the threat.
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