Pay TV Continues to Bleed Subscribers

The 13 largest pay-TV providers in the United States lost a total of about 150,000 subscribers in the third quarter of 2014, compared with a loss of about 25,000 in the third quarter of 2013. This year’s total rings up the largest third-quarter net loss on record.

Second-quarter subscriber losses totaled about 300,000, after gaining 260,000 subscribers in the first quarter. The data were published Friday by Leichtman Research Group.

The biggest losers were the U.S. cable companies. The top nine cable companies posted net losses of about 439,000 subscribers in the third quarter. Time Warner Cable Inc. (NYSE: TWC) lost 182,000 pay-TV subscribers and Comcast Corp. (NASDAQ: CMCSA) lost 81,000. Cablevision Corp. (NYSE: CVC) lost 56,000 and Charter Communications Inc. (NASDAQ: CHTR) lost 24,000. As a group, the cable companies still account for nearly 50 million subscribers.

Satellite providers Dish Network Corp. (NASDAQ: DISH) and DirecTV (NASDAQ: DTV) lost 12,000 and 28,000, respectively. There are 34 million total subscribers to the direct broadcast satellite providers.

The top two phone companies, AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) added 216,000 and 114,000 subscribers, respectively, to their high-speed networks. The 330,000 additions in the third quarter are about 18% below the 400,000 additions made in the same period a year ago. At the end of the quarter, the phone companies have 11.6 million subscribers.

Over the past year, major pay-TV providers have lost a net 105,000 subscribers, more than double the 45,000 net losses in the prior year. Leichtman expects subscriber numbers to post a modest gain in the fourth quarter, if the seasonal patterns hold.

The important point here is that cable and satellite are losing subscribers, while phone companies are adding them. Unfortunately they are not adding those subscribers in big enough numbers to post overall growth.

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