Now that Pay-TV has reported their latest losses, one thing stands out: it’s ugly.
The subscriber decline of 1.7 million from the previous quarter, a figure VIP predicted, is the greatest decline ever seen in the first quarter, and sees Pay-TV well on track to meet VIP’s estimated total 2020 decline of 8 million subscribers in the U.S.
In terms of losses by individual providers, AT&T continues to lead the pack, shedding 710,000 subscribers in the first three months of 2020. Comcast and Dish are close together, with the pair losing 770,000 subs. Given the size of their subscriber footprint, Charter did very well in Q1 to lose only 70,000 video customers, one-tenth that of AT&T.
Comparing the losses against Q1 2019 paints a grim picture for most providers, but especially for AT&T, who lost a massive 3.6 million video customers in a year. Comcast has the second highest losses, down by 900k, with Dish down 600k and Charter losing 400,000 customers versus Q1 2019.
This all points to a miserable 2020 for Pay-TV. The VMVPD market has stopped growing just as the bottom has fallen out of traditional MVPDs. The temptation is to say that the increase in subscription cancellations is due to Coronavirus. But recall that COVID-19 only began to hit the country in a big way in the last 2-3 weeks of Q1. If Coronavirus is to blame for the declines, then Q2 will be appalling, with the industry well on track to meet VIP’s estimate of 8 million subscribers lost across 2020.
It’s easy to lay the blame at the door of COVID-19, but there may be other factors at play. The consumer shift to wanting content on-demand at their fingertips, ready to binge, was even addressed by ViacomCBS CEO Bob Bakish this week, and is something that traditional TV networks have resolutely refused to adapt, even in SVOD services such as Hulu and CBS All Access. We may be witnessing the turning of the tide as more consumers move to models that support their consumption pattern; and it will be accelerated by COVID-19’s dual-prong of a production shutdown (less new content) and massive unemployment (less money to spend).