×
You will be redirected back to your article in seconds

Surprise: U.S. Pay-TV Subscribers Actually Grew Overall in Q3, Thanks to Internet Television

Cord-cutting has taken its toll on cable and satellite operators, which continue to shed subs at an accelerating pace. In the third quarter of 2017, however, the overall pay-TV ecosystem actually inched up when “virtual” subscription TV services are factored in — by a meager 0.6%, but growth nonetheless.

That’s according to a new report from MoffettNathanson. The firm estimates that total U.S. pay-TV subscribers overall grew by 90,000 in Q3 (versus a net loss of 275,000 in the year-earlier quarter).

So good news for programmers, right? Well, maybe. The top-line figures are a mixed bag, analyst Craig Moffett notes. For starters, not all programmers are included in the virtual pay-TV packages. Even if the do have distribution deals for the internet TV providers, not all their networks are necessarily in the lineup.

“Despite optimistic numbers suggesting the number of subscriber additions to vMVPDs [virtual multichannel video programming distributors] was even greater than the losses among traditional distributors, not everyone is benefiting equally,” Moffett wrote in the report.

Another caveat: Virtual pay-TV providers sell accounts to individuals, whereas traditional pay TV is sold to a household, making the comparison difficult to fully square.

The breakdown for Q3, per MoffettNathanson, is that virtual pay-TV providers DirecTV Now (excluding free trial subscribers), Sling TV, Hulu, YouTube TV, and PlayStation Vue saw a net gain of 962,000 subs. The firm’s estimates are adjusted to remove the impact of hurricanes that caused significant damage in parts of the U.S. and Caribbean during the quarter.

Traditional cable operators like Comcast and the satellite-delivered services of Dish Network and DirecTV dropped a collective 872,000 (versus 559,000 in the year-earlier period). That marks a 3.1% year-over-year decline in the segment. Note that from Q1 2014 through Q3 2017, traditional pay-TV ops have lost 9 million subs overall. “The trend of cord-cutting and cord-nevering won’t change much,” Moffett said.

The dynamics in the pay-TV biz are splitting programming groups in “haves” and “have-nots,” according to Moffett.

The haves: CBS, Fox, NBCUniversal and Disney, which are included in nearly every virtual internet-TV service. The have-nots, whose networks average less than 50% penetration into virtual pay-TV services, are A+E Networks, Discovery Communications, Scripps Networks Interactive (which is being acquired by Discovery), Viacom and independent networks, per Moffett’s analysis.

Most broadband-delivered skinny bundles are much cheaper than conventional cable, satellite or telco TV services — meaning the overall revenue flowing back to media companies is less per subscriber. Dish Network’s Sling TV starts at $20 monthly, YouTube TV is $35 per month and Hulu’s live TV service is $40 per month.

Among media investors, “views around cord-cutting and ratings/ads aren’t markedly better,” RBC Capital Markets analyst Steven Cahall wrote in a report Wednesday. “But another quarter has passed where [earnings per share] growth remained robust and the world didn’t fall apart.”

More Biz

  • Jussie Smollett Good Morning America

    Jussie Smollett Angrily Denies Complicity in Attack

    Attorneys for “Empire” actor Jussie Smollett issued a statement Saturday denying that he orchestrated his Jan. 29 assault, and saying he is “angered” and “devastated” by recent developments in the case. Chicago police want to interview Smollett, after learning new evidence from two Nigerian brothers who were released on Friday night. Local media outlets have [...]

  • Walt Disney Archives Founder Dave Smith

    Walt Disney Archives Founder Dave Smith Dies at 78

    Walt Disney Archives founder Dave Smith, the historian who spent 40 years cataloging and preserving the company’s legacy of entertainment and innovation, died Friday in Burbank, Calif. He was 78. Smith served as Disney’s chief archivist from 1970 to 2010. He was named a Disney Legend in 2007 and served as a consultant to the [...]

  • Colin Kaepernick Kneel

    Colin Kaepernick, Eric Reid Reach Settlement With NFL

    Colin Kaepernick and Eric Reid, two football players who alleged the National Football League colluded to oust them from the game after they started kneeling in protest of racial inequality during the playing of the national anthem, have reached a settlement in the matter, according to a statement from the sports organization and lawyers representing [...]

  • R. Kelly

    R. Kelly Could Be in ‘Big Trouble’ Over Alleged New Sex Tape, Attorney Says

    Strong allegations of sexual misconduct have followed R. Kelly for 25 years, but the singer has always managed to slip free. Yet reports that a videotape of him sexually assaulting an underage girl, combined with the outcry surrounding the Lifetime documentary “Surviving R. Kelly,” means that public sentiment, at the very least, is definitely not [...]

  • Christian Bale as Dick Cheney in

    New Media Residuals and Feature Films Contribute to Spike in Writers' Pay

    The outlook for members of the Writers Guild of America has brightened — even amid pervasive uncertainty in the entertainment industry. According to the most recent report to WGA West members, earnings surged 2.8% to $1.41 billion in 2017, thanks mostly to gains in feature films and new-media residuals. Total covered earnings for WGA West [...]

  • Joe Dante Gremlins

    Hollywood Execs Seek Licensing Deals at the New York Toy Fair

    On Feb. 16 more than 30,000 studio executives, buyers and toy company reps will gather in Manhattan for the annual Toy Fair New York, all vying for market share and trying to snag the latest hot trend in a fast-changing industry. Those working the film side of the business will focus much of their attention [...]

  • Lady Gaga Bradley Cooper A Star

    Universal Music Group Fuels 11.3% Rise in Vivendi's 2018 Revenues

    Vivendi’s revenues were up 11.3% to €13.93 billion ($15.7 billion) in 2018, powered by Universal Music Group, which delivered such hits as the “A Star Is Born” soundtrack and Drake’s new album. UMG’s revenues climbed by 10% to €6 billion ($6.8 billion) compared to 2017. On top of the “A Star Is Born” soundtrack, the [...]

More From Our Brands

Access exclusive content