Based on the numbers from these 9 company filings, the year-over-year decline in Pay-TV subscribers is largely attributed to declines at DISH Network (estimate 6 straight quarters of declines in residential video subscribers) and U-Verse (AT&T). After a large decline in video subscribers at DirecTV in Q2/2015 of 133,000 from the prior quarter, they actually added an estimated 5,000 net subs in Q3/2015.
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| U.S. Pay-TV video subscriber growth with the third consecutive quarter of declines |
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| Q3/2015 - the worst quarterly decline every; Q2/2015 was the worst. |
Cable companies actually had the best aggregate quarter since I began looking at data in 2007, with year-over-year declines of 0.9%. Satellite companies - DISH and DirecTV - had the worst quarter with year-over-year losses of 1.3%. The telco's - AT&T U-Verse and Verizon FiOS - saw the slowest growth in video subscribers ever with only 2.5% year-over-year growth, to a total of 11.661 million subs.
Which companies did the best in Q3/2015:
- Verizon FiOS (VZ) +42,000
- Charter Communications (CHTR) +12,000
- DirecTV (T) +5,000
Which companies did the worst in Q3/2015:
- DISH Networks (DISH) -178,000
- AT&T U-Verse (T) -117,000
- Comcast (CMCSA) -48,000
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| Cable companies with the best quarter in many years |
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| Satellite companies with the worst Y/Y quarter ever |
Thoughts:
I continue to believe that, while it is clear that the pay-TV industry in the U.S. is not a growth engine from a subscriber increase standpoint, it looks as if the infrastructure/structural advantages of the cable companies and telco's are taking video subscriber share from the satellite companies - DISH and DirecTV. More specifically, it looks as if the cable companies are continuing to rebound and will soon completely stabilize video subscriber numbers and possibly have net additions.
As DirecTV and DISH cannot provide some of the customer essentials - namely high speed internet -as well as cable companies investing heavily in both increasing their broadband speeds and video products (X1, Worldbox/Spectrum, TV Anywhere,Wi-Fi hotspots), cable is no longer in an inferior position to a majority of the U.S. population. Where satellite once had far superior video viewing -channels, HD,quality - the cable companies have finally caught up and will likely surpass them as they continue with improved customer service and video user interface.
Comparing the growth in Netflix (NFLX) to the Pay-TV industry as a whole, the growth in Netflix far exceeds the subscriber declines in video subscribers. Many in the Pay-TV industry view Netflix (NFLX) as both friend and foe. Foe due to Netflix being a much lower cost alternative video subscription to traditional TV, but a friend because Netflix consumes a lot of home bandwidth data (37% of all North American traffic) and the cable companies benefit as they offer the infrastructure Netflix needs to provide their product to customers. Considering the low price points, as well as the improvement in cable video subscribers, it looks as if Netflix is a complimentary service to the current cable bundle subscription.
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| CHTR expects to have video net additions in 2015 |
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| While NFLX growth in US is slowing, it is still growing mid-teens year-over-year |
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| Price points for Netflix (NFLX) - low enough to not fully cannibalize linear TV subscription,is more a complimentary subscription |
Companies included:
Charter Communications (CHTR)
Comcast (CMCSA)
Cablevision (CVC)
Time Warner Cable (TWC)
DirecTV
AT&T (T)
Verizon (VZ)
Mediacom
DISH Networks (DISH)
Charter Communications (CHTR)
Comcast (CMCSA)
Cablevision (CVC)
Time Warner Cable (TWC)
DirecTV
AT&T (T)
Verizon (VZ)
Mediacom
DISH Networks (DISH)
Links:
NFLX is also a friend for cable because of the general saturation of content...
ReplyDeleteThis increase in content/shows (particularly from OTT's) generally means that networks will far less leverage when trying to negotiate higher subscriber fee's. Save for those networks with a robust sport viewership.