Pay-TV and cable providers continued to bleed subscribers during the second quarter of 2023 as cord-cutting among consumers continued to accelerate.
The largest pay-TV providers in the U.S. – who represent about 96% of the market – lost about 1.73 million net subscribers in the second quarter of 2023, compared to a pro forma net loss of about 1.725 million during the same period a year ago, according to Leichtman Research Group.
“Over the past year, top pay-TV providers had a net loss of about 5,360,000 subscribers, compared to a net loss of about 4,235,000 over the prior year,” Leichtman Research Group president and principal analyst Bruce Leichtman added.
The firm notes that the top cable providers, which include Comcast, Charter, Altice, Breezeline, Cable One and other private companies, collectively lost over 925,000 subscribers during the quarter, compared to a loss of about 950,000 subscribers a year ago.
Other traditional services like DirecTV, Dish, Verizon Fios and Frontier collectively lost 688,000 subscribers, compared to a loss of about 710,000 subscribers a year ago, while internet-delivered services like YouTube TV, Sling TV, Hulu and Live TV and Fubo collectively lost 115,000 subscribers, compared to a loss of about 65,000 subscribers.
When looking at the individual companies, Comcast lost 543,000 subscribers, Charter lost 200,00, Dish lost 197,000, Fubo lost 118,000, Hulu and Live TV lost 100,000, Sling TV lost 97,000 and Altice lost 69,900 during the quarter. YouTube TV notably saw an increase of 200,000 subscribers during the quarter.
The tally comes as linear viewership fell below 50% for the first time ever as streaming hit a new record, according to Nielsen.
Total broadcast viewing last month finished at 20% of TV, a new low for the category. On a year-over-year basis, broadcast usage was down 5.4%. Cable viewing slipped to 29.6% of viewing for July, with a year-over-year drop of 12.5%. The top-viewed cable programs of the month were the Home Run Derby and College World Series on ESPN, followed by Hallmark’s “When Calls the Heart.”
Streaming accounted for 38.7% of all TV viewing, a new record led by “Suits” — a red-hot licensed title that’s burning through views on Netflix and Peacock — and “Bluey,” which were the most-watched shows of the month on streaming. Amazon Prime Video, Netflix and YouTube all hit all-time highs for viewing last month according to Nielsen, bolstered by shows like “Jack Ryan,” “The Witcher” and “The Lincoln Lawyer.”
YouTube maintains the largest share of streaming TV usage with 9.2% of total usage (not counting YouTube TV), up 5.6% vs. June. Netflix accounted for 8.5% of usage in July, while Hulu and Prime Video followed with 3.6% and 3.4% respectively.
Macquarie media analyst Tim Nollen warned in a research note to clients on Monday that linear has “passed the point of no return.”
“We think the metrics for linear TV are all bad. The public pay TV operators (cable, telco, satellite) that we track reported a weighted average 9.6 percent drop year-on-year in subscribers, and the media network groups’ affiliate fee revenues were down 2.5 percent,” he wrote. “Even pricing does not drive upside; this revenue line is probably permanently negative. Ad revenue across our media network coverage fell 13% on average in Q2, down from -8% in 1Q, which included the Super Bowl. We forecast 2H23 will get slightly better, but to remain negative including an off-political year comparison. We think the return of college and NFL football may drive more viewership of high-price live sports, now that the writers’ and actors’ strikes will delay general entertainment releases.”
According to Leichtman, the top pay-TV providers now account for about 71.9 million subscribers – with the top seven cable companies having 35.9 million video subscribers, other traditional pay-TV services having about 22.7 million subscribers, and the top internet-delivered (vMVPD) pay-TV services having about 13.4 million subscribers.
