The numbers reported are for the largest cable providers and Leichtman estimates that these companies represent 93% of all cable customers in the country.
The overall penetration rate of households buying traditional cable has dropped to 67.4% at the end of the second quarter of the year. The penetration rate had dropped just under 70% at the end of 2018.
For the quarter the cable companies lost 1.7% of subscribers which would equate to a trend of losing 6.7% for the year. However, that number needs to be put into context. The biggest drop of customers came from AT&T / DirectTV which lost over 1.3 million customers so far this year. The company decided to end discount plans to customers and has been letting customers go who won’t agree to pay full price after the end of discount plans. The company says they are glad to be rid of customers who are not contributing to the bottom line of the company. At some point soon that purge should end, and the company should return to a more normal trajectory. Normalizing for AT&T, the whole industry is probably still losing customer currently at a rate between 4% and 5% of total market share annually.
|4Q 2018||2Q 2019||1Q Change||2Q Change||2Q|
|AT&T / DirecTV||22,926,000||21,605,000||(543,000)||(778,000)||-3.5%|
These same companies have lost over 5 million traditional cable subscribers since the end of the second quarter in 2018.
Some other observations:
- This is the first time that Comcast has lost 1% of cable customers in a quarter. Until recently the company was holding steady with cable customer counts due to the fact that the company has continued to add new broadband customers, many who bought cable TV.
- Frontier is bleeding both cable customers and broadband customers, and the company lost 71,000 broadband customers in the second quarter to go with the loss of 46,000 cable customers.
- The only other companies that lost more than 2% of their cable customer base in the quarter are Mediacom and Cable ONE.
- The loss of 79,000 customers is the smallest quarterly loss for Dish Networks since 2014.
The biggest losers in the industry are likely the programmers. They are losing millions of monthly subscriptions that were paying for their programming. A few networks are recovering some of these losses by selling programming to providers like SlingTV or PlayStation Now – but overall the programmers are losing a mountain of paying households.
The big question for the industry is if there is some predictable path for cord cutting. Will it continue to accelerate and kill the industry in a few years or will losses be slow and steady like happened with landline telephones?