Cable Customers 3Q 2017

I saw a headline the other day where TiVo said that cord cutting was slowing down, so I thought I’d take a fresh look at the subscriber numbers for the last quarter for the largest cable providers. These numbers come from Leichtman Research Group which has been tracking the industry for a number of years. The following numbers compare the industry for performance in just the third quarter of 2017.

2Q 2017 3Q 2017 Change
Comcast 22,516,000 22,390,000 (126,000) -0.6%
DirecTV 20,856,000 20,605,000 (251,000) -1.2%
Charter 17,071,000 16,982,000 (89,000) -0.5%
Dish 11,892,000 11,668,000 (224,000) -1.9%
AT&T 4,666,000 4,648,000 (18,000) -0.4%
Cox 4,245,000 4,220,000 (25,000) -0.6%
Verizon 3,853,000 3,718,000 (135,000) -3.5%
Altice 3,462,700 3,430,200 (32,500) -0.9%
Frontier 1,007,000 981,000 (26,000) -2.6%
Mediacom 829,000 823,000 (6,000) -0.7%
Cable ONE 297,990 287,260 (10,730) -3.6%
90,695,690 89,752,460 (943,230) -1.0%

These companies represent roughly 95% of the entire cable market, so these numbers tell the story of the whole market. From what I can see from many of my clients, many small cable companies are likely doing even worse than these numbers.

It’s hard to see a slowing of cord cutting in these numbers. The loss of 943,230 customers from the quarter is the largest loss to date for a quarter. And that number doesn’t tell the whole story. One has to assume that the cable providers also picked up new subscribers due to new housing units being built. The housing market is still going strong and it’s likely that at least 250,000 new living units were added to housing inventory in the third quarter. Factoring in that number means the actual loss of cable customers is closer to 1,130,000 for the quarter.

Leightman does note that two of these providers offer an OTT offering. Sling TV, operated by Dish Networks added 240,000 customers for the quarter. And DirecTV Now added another 296,000 customers for the quarter. But these are cord cutting products and those new customers have likely dropped traditional cable. It’s also been widely speculated that there is very little profit in the OTT offerings since the providers are still holding prices low to attract customers.

The rate of loss is definitely increasing. For example, the loss for the traditional cable companies in this group was 290,000 customers for the quarter, compared to a loss of 90,000 customers in the same quarter of 2016. The loss for the satellite providers for the third quarter of 2017 was 475,000 customers compared to a gain of 5,000 customers in the same quarter a year ago.

These losses feel even more significant when viewed on a daily basis. The industry lost almost 12,400 customers per day during the quarter. That certainly must be burning up the phone lines to customer service.

Not shown in these numbers are cord shavers – households that are downgrading to smaller cable packages. None of these companies report that statistic, but we can see the impact of cord shaving by looking at the number of paid customers for the various networks – and just about every channel is in freefall.

There is no way to look at these numbers without seeing an industry in crisis. The cable companies have compensated for some of these losses through rate increases, but that is likely to drive even more households to finally cut the cord.

One thought on “Cable Customers 3Q 2017

  1. I am a mayor of a small prairie city in MN with well known incumbent (and struggling) telco and cable incumbents and a regional broadband fiber provider with trunk fiber but no local grid due to earlier franchise restriction from cable company. All are inside our city of <500 premises.
    We must assure our future in the face of these declines which signal to us that there is not much chance for our residents to acquire the MN 2026 standard of 100Mb/20Mb broadband at an economical price.
    These are my 'take away questions' from the 19-20 December blogs:
    1) Does the 'cable report' indicate the beginning of a more rapid decline in the cable business?
    2) Is the decline in 'cable' an early harbinger of a more rapid ground swell by customers to do cord cutting (eliminate any cable service) or to apply cord shaving, (reducing their cable packages) to acquire more news and entertainment directly from their Internet connections such as Netflix, Hulu, etc.?
    3) Does this mean that the incumbent fiber, cable, telco providers are likely to scale back any growth plans for small rural cities and rural townships within their service footprints?

    In our case, I am leaning toward finding a way for our city to build at least dark cable infrastructure to every premise and hope we can attract one or more transport and content providers.
    We are not looking for a handout…! Willing partner(s) is what we hope to find.
    Or… is there some other 'solution'?

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