Q2 Cord-Cutting Review: A Quarter of Pay-TV Subs Exited Since 2016
The line has been crossed. While the inexorable decline of U.S. pay TV has continued every quarter since 2016, the most recent results — as of June 30, 2021 — mark a watershed moment: MVPD subscribers are now 25% below where they were in Q1 2016.
This represents 21.4 million fewer subscribers (with 10M of these being lost by AT&T alone, a sign of terrible mismanagement of the DirecTV assets).
Think about this: Of everyone who subscribed to a MVPD as of March 31, 2016, one in four no longer do so.
As VIP has previously covered, virtual MVPDs such as YouTube TV were not the magic solution the industry hoped they would be, but they have stanched the bleeding. The total number of combined MVPD and VMVPD subscribers as of June 30 was 75.4 million, a decline of 3.4 million subscribers (or -4.3%) from the same period last year.
In fact, this quarter represents the second-worst quarterly MVPD decline in the last five years, with only Q1 2020 seeing more cancellations across DirecTV, Comcast Xfinity, Charter Spectrum, Altice One, Dish Network and Verizon Fios (-1.68 million, marginally edging this quarter’s -1.67 million fall).
It’s not all doom and gloom for MVPD providers, as the majority of them are also broadband Internet providers. Even if you cut the cord, you will still need the Internet to watch the alternative video services with which you’re replacing cable. Across the five providers that offer both, broadband subscriptions outstrip cable service, with Comcast and Charter seeing over 10 million more Internet subscribers than video.
On the VMVPD side, only Hulu, Sling TV and FuboTV provided Q2 subscriber figures (though a spokesperson for Philo confirmed VIP+’s estimate is in the ballpark). Hulu continues to go backward, with this the third straight quarter where subscriptions have fallen. Perhaps the strategy of constant price hikes wasn’t as smart as execs assumed.
Fubo reported the fourth straight quarter of growth, now with 682,000 subscribers, making it the fifth-largest VMVPD service. CEO David Gandler provided an outlandish target of 915,000 subscribers by the end of 2021, which VIP+ feels will be very hard to reach. This seems based upon last year’s growth as the NFL season began — VMVPDs tend to see cyclical Q3/Q4 NFL growth and Q1 NFL declines — but the market is different in 2021.
Paramount+ has many more subscribers than CBS All Access, with NFL games a core part of the offering. Tubi has the right to multicast Fox games when Fox sees fit. Peacock will multicast NBC’s Sunday Night Football. ABC will be having exclusive Monday Night Football games. With NFL games available on many more easy-to-access platforms this year, demand for products like Fubo should be tempered.
The only direction MVPD and VMVPD subscriptions are headed is down, especially in the wake of media companies prioritizing their new streaming assets with content once meant for TV. It took five years for MVPDs to lose a quarter of their subscriber base. It will be three years at best for this to happen again.