Cord-Cutting 2021 Review: Bad but Not 2020 Bad

Cord Cutting Review
Cheyne Gateley/VIP

We all know by now that the story whenever video subscription figures are tallied up isn’t, “Is it okay?” but one of “How bad is it?”

With Dish the last of the multichannel distributors to report its fourth-quarter subscriber figures as of Feb. 24, the annual migration away from pay TV is now possible to be calculated. First, the good news: 2021’s customer losses were not nearly as steep as the 3.4 million exiting the system in 2020.

The bad news is that 2.8 million customers who canceled their TV service in 2021 represent the third greatest annual loss for the industry, a fall of -3.5%, for a total of 75.8 million subscribers across the major services. 2020 was the worst year ever, with 2019’s losses of 3.1 million second.

A likely reason for the slowing of canceled subscriptions is that the industry is getting closer to its event horizon, where everyone who wants to leave has gone. There are still millions who value pay TV as an entertainment medium, and they will provide a sizable rump for the industry.

Eyes will be drawn to the evisceration of customers among the traditional MVPDs, down by 21.8 million (-26%) from 2016, but note that over half (53%) of this figure has since subscribed to a virtual MVPD service.

Hopefully at this point in time, the industry will have moved past viewing VMVPD subscribers as cord-cutters. A VMVPD subscriber still subscribes to TV service, watching TV networks and generating affiliate revenue for the networks. Their growth suggests many consumers still want access to TV networks, just via a different provider.

This is apparent when viewing the annual subscriber churn for public providers. (Note DirecTV no longer shares any information since its spinoff from AT&T, and YouTube TV has failed to report a subscriber figure for five straight quarters.)

The only providers seeing growth were VMVPDs, led by FuboTV, which more than doubled subscribers from 548,000 to 1.1 million. All reporting MVPDs saw losses, with only Charter’s Spectrum service reporting a below-average decline of -2.7%, perhaps aided by its big-city locales and strong local news channels, which remain important for many.

Comcast and DirecTV are the two MVPDs seeing the steepest declines, in total subscribers, in the last three years. Comcast has shed 3.5 million Xfinity video subscribers in two years (-17%) since 2018, which is why the company gives internet subscribers free access to Peacock Premium, enabling their advertising reach to not be impeded by the video erosion.

VIP+ estimates DirecTV lost two-fifths of its subscribers (-41%) over the last three years, a loss of 7.9 million customers. Very few of these migrated to its VMVPD service that seems to change names every few months — currently DirecTV Stream, suggesting an unprecedented mismanagement by AT&T of what used to be the largest MVPD in the U.S.

As noted earlier in this article, very few VMVPDs opt to regularly update the world with their subscriber figures. AT&T stopped releasing figures for DirecTV Stream prior to spinning off its video business, with this service and Philo both not releasing any updates throughout 2021 along with the aforementioned YouTube TV.

Based on that, VIP+ has produced a number of estimates for non-reporting providers, which are influenced by trends and when representatives from companies confirm directionality. What is notable is that annual growth for most VMVPDs ranges from 200K to 500K; it is not a gold-rush market by any means.

Predicting where the industry will be in a year’s time when Q4 2022 reporting is finished, VIP+ anticipates it will be the first year since the mid-2000s where the major MVPDs see fewer than 60 million subscribers. VMVPD subscriptions will grow by 1.5 million-2 million overall, with the majority of providers continuing to prefer a cloak of mystery regarding their subscribers.

We are probably three to four years away from the pay TV ecosphere reaching its flatline, where there will be seasonal returnees for the NFL with perhaps even MVPDs finally embracing this and offering September-February packages. Until then, expect more reports like this one, grimly documenting pay TV’s fall from the peak of the mid-2010s.