Tough Q1 for U.S. Pay TV

Depending on how you parse the numbers, the first quarter of 2016 was either weak or bad for the U.S. pay TV industry. The difference lies in ...

Broadband growth slowing, cable still leads
Broadband growth slowing, cable still leads
Depending on how you parse the numbers, the first quarter of 2016 was either weak or bad for the U.S. pay TV industry. The difference lies in whether you count subscribers to DISH's Sling TV OTT service. With the Sling numbers, the industry as a whole gained 10,000 video subs; without the Sling numbers, the industry lost 120,000.

According to Leichtman Research Group, the 13 largest pay TV providers in the United States - representing about 95% of the market - added about 10,000 net video subscribers in 1Q 2016, compared to a gain of about 170,000 subscribers in 1Q 2015.

The top pay TV providers account for 94.2 million subscribers, with the top nine cable companies having 49.1 million video subscribers, satellite TV companies having 34 million subscribers (including about 665,000 from DISH's Internet-delivered Sling TV), and the top telephone companies having 11.1 million subscribers.

Other findings indicate:

  • The top nine cable companies added about 50,000 video subscribers in 1Q 2016, compared to a loss of about 65,000 subscribers in 1Q 2015. Top cable MSOs had not reported net gains in a first quarter since 2008.
  • Satellite TV providers added 305,000 subscribers in 1Q 2016 (including gains from Sling TV), compared to a gain of 95,000 in 1Q 2015. Not including gains from Sling TV, DBS providers added about 175,000 subscribers in 1Q 2016, compared to a loss of 74,000 in 1Q 2015. DirecTV's net adds of 328,000 in 1Q 2016 were more than in any quarter since 1Q 2009.
  • The top phone providers lost 344,000 video subscribers in 1Q 2016, compared to a gain of 140,000 subscribers in 1Q 2015. AT&T U-verse's 380,000 net losses in 1Q 2016 were the most losses ever in a quarter by any provider.

"While DirecTV and top cable providers had a comparatively strong quarter in 1Q 2016, their gains were largely offset by a historically weak quarter for AT&T U-verse," said Bruce Leichtman, president and principal analyst for LRG. "Overall, the traditionally strong first quarter for the pay TV industry was tepid this year. Despite slight gains in the quarter, net adds in 1Q 2016 were down by about 160,000 from a year ago."

More in OTT