Traditional cable providers continue to lose cable TV customers at the same fast pace as the second quarter of the year. In the third quarter, the cable companies list 1.68 million customers after losing over 1.65 million customers in the second quarter.
These numbers come from Leichtman Research Group, which compiles most of these numbers from the statistics provided to stockholders, except for Cox, which is privately held and estimated. Leichtman says this group of companies represents 96% of all traditional U.S. cable customers.
2Q 2022
Change
Change
Comcast
16,582,000
(562,000)
-3.3%
Charter
15,291,000
(204,000)
-1.3%
DirecTV
13,500,000
(400,000)
-2.9%
Dish Network
7,607,000
(184,000)
-2.4%
Verizon
3,383,000
(96,000)
-2.8%
Cox
3,140,000
(90,000)
-2.8%
Altice
2,491,800
(82,400)
-3.2%
Mediacom
525,000
(15,000)
-2.8%
Frontier
322,000
(21,000)
-6.1%
Breezeline
323,038
(9,274)
-2.8%
Cable ONE
202,000
(19,000)
-8.6%
Total
63,366,838
(1,682,674)
-2.6%
Hulu Live
4,400,000
400,000
10.0%
Sling TV
2,211,000
214,000
9.7%
FuboTV
1,231,000
284,265
30.0%
Total Cable
39,536,512
(981,674)
-2.5%
Total Telco / Satellite
25,513,000
(701,000)
-2.7%
Total vMvPD
7,143,735
898,265
12.6%
The losses are fairly even across the industry, with every large provider except Charter losing more than 2% of total cable customers for the quarter. At the current pace, the industry might lose 10% of all cable customers this year. To put these numbers into perspective, these same companies had over 85 million cable customers at the end of 2018 – the industry has lost over a quarter of its customers since then.
In the quarter, the three online cable alternatives that LRG tracks gained almost 900,000 new customers for the quarter, A few major online alternatives, like YouTube TV aren’t on the list since they don’t announce customer counts.
The biggest percentage losers continue to be Frontier and Cable ONE, with Comcast the third largest.
Leichtman Research Group recently released the cable customer counts for the largest providers of traditional cable service at the end of the second quarter of 2022. LRG compiles most of these numbers from the statistics provided to stockholders, except for Cox, which is privately held and estimated. Leichtman says this group of companies represents 96% of all traditional U.S. cable customers.
The traditional cable providers continue to lose customers at a torrid pace, losing over 1.65 million customers in the second quarter, up from 1.4 million customers the previous quarter. Overall, the traditional cable providers lost almost 18,200 customers every day during the quarter.
The big news for the quarter is that traditional cable providers are now in less than half of homes and have collectively dropped to a 49% market penetration. The industry has lost almost seventeen million customers since the end of 2017, when traditional cable was in over 73% of homes.
2Q 2022
Change
Change
Comcast
17,144,000
(520,000)
-2.9%
Charter
15,495,000
(226,000)
-1.4%
DirecTV
13,900,000
(400,000)
-2.8%
Dish Network
7,791,000
(202,000)
-2.5%
Verizon
3,479,000
(87,000)
-2.4%
Cox
3,230,000
(80,000)
-2.4%
Altice
2,574,200
(84,500)
-3.2%
Mediacom
540,000
(15,000)
-2.7%
Frontier
343,000
(20,000)
-5.5%
Breezeline
332,312
(6,709)
-2.0%
Cable ONE
221,000
(17,000)
-7.1%
Total
65,049,512
(1,658,209)
-2.5%
Hulu Live
4,000,000
(100,000)
-2.4%
Sling TV
2,197,000
(55,000)
-2.4%
FuboTV
946,735
(109,510)
-10.4%
Total Cable
39,536,512
(949,209)
-2.3%
Total Telco / Satellite
25,513,000
(709,000)
-2.7%
Total vMvPD
7,143,735
(264,510)
-3.6%
It doesn’t look like people are replacing traditional cable with an online alternative like Hulu and Sling TV – which collectively lost 264,000 customers in the quarter. A few major online alternatives like YouTube TV aren’t on the list, but the loss in traditional cable far surpasses any possible net gain for the online cable alternatives.
Charter is still losing customers at a slower rate than everybody else in the industry and has for the past several years – although Charter’s losses are starting to climb. Charter CEO Tom Rutledge says that Charter actively points out to customers that the online alternatives cost more. The rest of the industry seems resigned to letting cable customers go.
The biggest percentage losers continue to be Frontier and Cable ONE.
In the first quarter of this year, the big cable companies added 482,000 customers while telcos added over 50,000 customers. In what is a surprise to the industry, that growth has disappeared, and all of the big ISPs collectively lost almost 150,000 customers. That’s a loss of 60,000 customers for the cable companies and 88,000 for the big telcos.
The following statistics have been compiled by the Leichtman Research Group, which tracks the broadband performance of the largest ISPs in the country.
The other big news is that the Fixed Wireless Access (FWA) products of T-Mobile and Verizon added 816,000 customers in the second quarter to bring the sector to net growth of 668,000 customers. This is huge news – FWA is booming while the big ISPs are standing still. The FWA product is home broadband delivered using cellular frequencies. T-Mobile and Verizon are aggressively marketing the product, which is touted to have download speeds over 100 Mbps. The market is going to get even hotter when AT&T and Dish networks enter the market in a big way.
The numbers for the second quarter of 2022:
2Q 2022
2Q Change
% Change
Comcast
32,163,000
0
0.0%
Charter
30,253,000
(21,000)
-0.1%
AT&T
15,509,000
(24,000)
-0.2%
Verizon
7,412,000
12,000
0.2%
Cox
5,560,000
0
0.0%
Lumen
4,377,000
(93,000)
-2.1%
Altice
4,333,600
(39,600)
-0.9%
Frontier
2,827,000
8,000
0.3%
T-Mobile FWA
1,544,000
560,000
56.9%
Mediacom
1,468,000
0
0.0%
Windstream
1,178,500
2,500
0.2%
Cable ONE
1,059,000
2,000
0.2%
Breezeline
717,919
(1,689)
-0.2%
Verizon FWA
700,000
256,000
57.7%
TDS
500,800
5,600
1.1%
Consolidated
381,213
1,063
-0.2%
Total
109,984,032
667,874
0.3%
Total Cable
75,554,519
(60,289)
-0.1%
Total Telco
32,185,513
(87,837)
-0.3%
FWA
2,244,000
816,000
57.1%
There is a lot to unpack in these numbers:
The cable companies have gained customers every quarter for far longer than a decade, so this net loss for the sector is a big surprise.
There is another story underneath the big telco losses – fiber is doing well. AT&T added 316,000 fiber customers in the quarter but still had a small net customer loss. Frontier added 54,000 fiber customers for the quarter and had a small net customer gain. Verizon added 36,000 FiOS customers in the quarter. Lumen added 28,000 fiber customers for the quarter but continued to bleed DSL customers.
T-Mobile leaped to become the ninth largest ISP in the country.
TDS repeated as the fastest growing traditional ISP.
Lumen lost the largest percentage of customers compared to other telcos. Altice was the biggest percentage loser among cable companies.
Leichtman Research Group recently released the cable customer counts for the largest providers of traditional cable service at the end of the first quarter of 2022. LRG compiles most of these numbers from the statistics provided to stockholders, except for Cox, which is privately held and estimated. Leichtman says this group of companies represents 96% of all traditional U.S. cable customers.
The industry continues to bleed customers, losing over 1.4 million customers in the fourth quarter, up from 1.3 million customers the previous quarter. Overall, the traditional cable providers lost almost 15,900 customers every day during the quarter.
1Q 2022
Change
Change
Comcast
17,664,000
(512,000)
-2.8%
Charter
15,721,000
(112,000)
-0.7%
DirecTV
14,300,000
(300,000)
-2.1%
Dish Network
7,993,000
(228,000)
-2.8%
Verizon
3,566,000
(78,000)
-2.1%
Cox
3,310,000
(80,000)
-2.4%
Altice
2,658,700
(73,600)
-2.7%
Mediacom
555,000
(17,000)
-3.0%
Frontier
363,000
(17,000)
-4.5%
Breezeline
339,021
(7,708)
-2.2%
Cable ONE
238,000
(23,000)
-8.8%
Total
66,707,721
(1,448,308)
-2.1%
Hulu Live
4,100,000
(200,000)
-4.7%
Sling TV
2,252,000
(234,000)
-9.4%
FuboTV
1,056,245
(73,562)
-6.5%
Total Cable
40,485,721
(825,308)
-2.0%
Total Telco / Satellite
26,222,000
(623,000)
-2.3%
Total vMvPD
7,408,245
(507,562)
-6.4%
It doesn’t look like people are replacing traditional cable with an online alternative like Hulu and Sling TV – which are also losing customers. A few major online alternatives like YouTube TV aren’t on the list, but the loss in traditional cable far surpasses any net gain for the online cable alternatives.
Charter is still losing customers at a slower rate than everybody else in the industry and has for the past several years. Charter CEO Tom Rutledge explains this by Charter’s willingness to move cable subscribers to less expensive tiers, such as the $44.99 Spectrum TV Select product. He says that Charter actively points out to customers that the online alternatives cost more. The rest of the industry seems resigned to letting cable customers go.
This drops the overall penetration rate of traditional TV to just above 51% of households. The industry has lost over fifteen million customers since the end of 2017 when traditional cable was in over 73% of homes.
One of the consequences of the rapid drop in cable customers is that cable companies are losing the power of the bundle. The traditional cable industry has lost almost one-third of all cable customers since 2017, greatly reducing opportunities to retain customers with bundling discounts.
Leichtman Research Group recently released the cable customer counts for the largest providers of traditional cable service at the end of the fourth quarter of 2021. LRG compiles most of these numbers from the statistics provided to stockholders other than for Cox, which is privately held and estimated. Leichtman says this group of companies represents 96% of all U.S. cable customers.
The industry continues to bleed customers, losing over 1.3 million customers in the fourth quarter. This follows similar losses in the second and third quarters and a drop of over 1.6 million customers in the first quarter of 2021. Overall, the traditional cable providers list almost 5.6 million customers for the year or a loss of 15,300 customers every day during the year.
Annual
Annual
4Q
4Q
4Q 2021
Change
Change
Change
Change
Comcast
18,176,000
(1,670,000)
-8.4%
(373,000)
-2.0%
Charter
15,833,000
(367,000)
-2.3%
(58,000)
-0.4%
AT&T / DirecTV
14,600,000
(1,905,000)
-11.5%
(400,000)
-2.7%
Dish Network
8,221,000
(595,000)
-6.7%
(203,000)
-2.4%
Verizon
3,644,000
(283,000)
-7.2%
(70,000)
-1.9%
Cox
3,390,000
(260,000)
-7.1%
(70,000)
-2.0%
Altice
2,732,300
(240,900)
-8.1%
(70,700)
-2.5%
Mediacom
572,000
(71,000)
-11.0%
(18,000)
-3.1%
Frontier
380,000
(105,000)
-21.6%
(20,000)
-5.0%
Atlantic Broadband
346,729
(36,271)
-9.5%
(13,271)
-3.7%
Cable ONE
261,000
(50,000)
-16.1%
(18,000)
-6.5%
Total
68,156,029
(5,583,171)
-7.6%
(1,313,971)
-1.9%
Hulu Live
4,300,000
300,000
7.5%
300,000
7.5%
Sling TV
2,486,000
12,000
0.5%
(70,000)
-2.7%
FuboTV
1,129,807
581,927
106.2%
185,202
19.6%
Total Cable
41,311,029
(2,695,171)
-6.1%
(620,971)
-1.5%
Total Telco / Satellite
26,845,000
(2,888,000)
-9.7%
(693,000)
-2.5%
Total vMvPD
7,915,807
893,927
12.7%
415,202
5.5%
It doesn’t look like people are replacing traditional cable with an online alternative like Hulu and Sling TV. A few major online alternatives like YouTube TV aren’t on the list, but the loss in traditional cable far surpasses the net gain for the online cable alternatives.
Charter is losing customers at a far slower rate than everybody else in the industry and has for the past several years. Charter CEO Tom Rutledge explains this by Charter’s willingness to move cable subscribers to less expensive tiers, such as the $44.99 Spectrum TV Select product. He says that Charter actively points out to customers that the online alternatives cost more. The rest of the industry seems resigned to letting cable customers go.
Leichtman Research recently released the broadband customer statistics for the end of the fourth quarter of 2021. The numbers show that broadband growth has slowed significantly for the sixteen largest ISPs tracked by the company. LRG compiles these statistics from customer counts provided to stockholders, except for Cox which is privately owned.
Net customer additions sank each quarter during the year. The first quarter of 2021 saw over 1 million net new broadband customers. That dropped to just under 900,000 in the second quarter, 630,000 in the third quarter, and now 423,000 in the fourth quarter. The statistics for all of 2021 and for the fourth quarter are as follows:
Annual
%
4Q
%
4Q 2021
Change
Change
Change
Change
Comcast
30,574,000
1,327,000
4.3%
213,000
0.7%
Charter
28,879,000
1,210,000
4.2%
190,000
0.6%
AT&T
15,384,000
120,000
0.8%
(6,000)
0.0%
Verizon
7,129,000
236,000
3.3%
28,000
0.4%
Cox
5,380,000
150,000
2.8%
20,000
0.4%
CenturyLink
4,767,000
(248,000)
-5.2%
(70,000)
-1.5%
Altice
4,389,600
(3,400)
-0.1%
(1,900)
0.0%
Frontier
2,834,000
(35,000)
-1.2%
10,000
0.4%
Mediacom
1,438,000
25,000
1.7%
(3,000)
-0.2%
Windstream
1,109,300
55,200
5.0%
17,500
1.5%
Cable ONE
992,000
63,000
6.4%
25,000
2.4%
Atlantic Broadband
698,000
18,778
2.7%
(222)
0.0%
WOW!
498,800
12,900
2.6%
2,200
0.4%
TDS
493,300
32,700
6.6%
3,200
0.6%
Cincinnati Bell
436,100
3,900
0.9%
1,000
0.2%
Consolidated
401,357
(16,793)
-4.2%
(6,097)
-1.6%
Total
105,403,457
2,951,285
2.8%
422,681
0.4%
Cable
72,849,400
2,803,278
3.8%
445,078
0.6%
Telco
32,554,057
148,007
0.5%
(22,397)
-0.1%
Fixed Wireless
874,000
719,000
82.3%
There are a few interesting things to keep an eye on in the future. The growth for Comcast and Charter have slowed significantly and my prediction is that there will come a quarter within a year where one or both of them will lose net customers. For several years running, Frontier has been bleeding customers but seems to be turning it around. The big loser is now CenturyLink.
For some reason, LRG is leaving out fixed cellular customers. At the end of 2021, T-Mobile reported 646,000 fixed cellular customers, with 546,000 added in 2021. Verizon is up to 228,000 fixed cellular customers, up by 173,000 during 2021. The two companies, along with AT&T, are making a major push in this market and expect to add millions of customers in 2022 – many at the expense of the other ISPs on the list. It’s an odd choice to exclude these customers since the speeds on fixed cellular are faster than the DSL delivered by the telcos on the list. Also missing are other big providers that are probably larger than Consolidated, like a few of the largest WISPs and fiber overbuilders like Google Fiber.
But even after counting the growth of fixed cellular broadband, it’s obvious that the broadband market growth has cooled. The burst of new customers in 2020 and the first half of 2021 were clearly fueled by homes buying broadband during the pandemic.
It’s also worth noting that the numbers for WOW! and Atlantic Broadband (now Breezeline) have been adjusted for the sale of customers by WOW!.
Leichtman Research Group recently conducted a nationwide poll of 2,000 households asking about broadband usage. LRG has been tracking broadband for many years and reports that overall broadband subscriptions are at 87% of all households in 2021, up from 83% in 2016, and 69% in 2006. There are a few results of the survey that I think warrant additional examination.
According to the LRG survey, 63% of broadband subscribers rate the speed of their Internet connection as 8 to10 on a 10-point scale with 10 being excellent. In a similar question, 69% of respondents who subscribe to speeds of at least 100 Mbps are satisfied with their broadband service.
The big news here isn’t that many homes are satisfied with broadband speeds – it’s that one-third of all households don’t think their broadband speeds are great. The news is that over 30% of homes with speeds over 100 Mbps are not satisfied with their broadband.
My consulting firm conducts surveys at the community level, and I often see similar results. LRG only released the high-level summary responses to the survey, so we don’t know all of the questions they asked. But if LRG only asked about broadband speeds, they asked the wrong question. This was borne out by the response to a different survey question where 45% of the respondents in the LRG poll don’t even know their subscribed broadband speed.
What I’ve found through surveys is that people don’t really care about broadband speeds – they care if their broadband connection works. Most people haven’t the slightest idea at any given time how much broadband speed is being delivered to their home. I sometimes hear dismay when people finally take a speed test and find out that they are only receiving a portion of what they are paying for – but even these people might not be unhappy with broadband if it works.
Here are the things I hear from the public when we ask the same kinds of questions that LRG asked:
One of the most common complaints I hear about big cable company broadband is outages. The issue in most markets is not big hours-long outages but frequent small outages of a few minutes in duration. These small drive people mad because it invariably disrupts whatever they were doing with the broadband.
Right behind unhappiness with outages is unhappiness with slowdowns. The complaint I hear is that broadband works most of the time but then gets maddingly slow at times. It’s almost as disruptive as an outage when broadband slows to a crawl.
The other big recurring complaint I hear is when broadband won’t perform an expected function. People become quickly unhappy with their broadband connection when they can’t do something like maintain a Zoom call or if they get kicked off a school or office connection. Somebody might have no trouble streaming Netflix movies but find that they can’t stream the more demanding live sports broadcasts.
This survey reminded me of something that has become clear to me over the last year – policymakers are fixated on broadband speeds but people care about broadband performance. These are not the same thing. I’ve never talked to anybody outside the industry who cares one iota about the definition of broadband – they only care if everybody in the household can use the Internet at the same time.
From a policy perspective, it seems like we’ve decided that there are no urban broadband problems because everybody can buy Internet faster than 100 Mbps download. Even if we set aside the issue that many homes can’t afford broadband, this survey points out that a lot of urban households find their broadband connection to be inadequate.
Our policies are all due to the fixation with broadband speeds. Concentrating on speeds as the only way to measure broadband means that policymakers can yield to cable company lobbying that says we have no urban broadband issues.
I am absolutely thrilled that we are finally going to use some money to bring faster broadband to rural areas that have little or no broadband. But policymakers need to understand that this will not eliminate broadband problems elsewhere. A huge number of people in urban areas are still not happy with their broadband connection – and that’s a problem that’s not going to go away by throwing grant money at rural markets. If anything, building rural fiber is going to remind urban residents that they have something of lesser quality.
The largest traditional cable providers collectively lost over 1.5 million customers in the second quarter of 2020 – an overall loss of 2.0% of customers. This is the smaller than the loss in the first quarter of 1.7 million net customers. To put the quarter’s loss into perspective, the big cable providers lost 16,700 cable customers per day throughout the quarter.
The numbers below come from Leichtman Research Group which compiles these numbers from reports made to investors, except for Cox which is estimated. The numbers reported are for the largest cable providers, and Leichtman estimates that these companies represent 95% of all cable customers in the country.
Following is a comparison of the second quarter subscriber numbers compared to the end of the first quarter of 2020:
1Q 2020
2Q 2019
Change
% Change
Comcast
20,367,000
20,845,000
(478,000)
-2.3%
Charter
16,168,000
16,074,000
94,000
0.6%
DirecTV
14,290,000
15,136,000
(846,000)
-5.6%
Dish TV
9,017,000
9,057,000
(40,000)
-0.4%
Verizon
4,062,000
4,145,000
(83,000)
-2.0%
Cox
3,770,000
3,820,000
(50,000)
-1.3%
AT&T U-verse
3,400,000
3,440,000
(40,000)
-1.2%
Altice
3,102,900
3,137,500
(34,600)
-1.1%
Mediacom
676,000
693,000
(17,000)
-2.5%
Frontier
560,000
594,000
(34,000)
-5.7%
Atlantic Broadband
311,845
314,645
(2,800)
-0.9%
Cable One
290,000
303,000
(13,000)
-4.3%
Total
76,014,745
77,559,145
(1,544,400)
-2.0%
Total Cable
44,685,745
45,187,145
(501,400)
-1.1%
Total Satellite
23,307,000
24,193,000
(886,000)
-3.7%
Total Telco
8,022,000
8,179,000
(157,000)
-1.9%
Some observations about the numbers:
The big loser is AT&T, which lost 886,000 traditional video customers between DirecTV and AT&T U-verse. For many quarters AT&T claimed losses were due to the company eliminating low-margin customers. It seems losses are more likely now due to price increases.
The big percentage loser is Frontier that lost almost 6% of its cable customers in the quarter. The Frontier numbers have been lowered for both quarters to reflect the sale of its property in the Pacific northwest.
While DirecTV continues to bleed customers, Dish Networks has seemed to have stemmed losses.
The most interesting story is for Charter that gained customers during the quarter. The company credits the gains to offering a lower-price package and also to a marketing campaign that is giving two months free of broadband. 329,000 customers took that offer in the second quarter and nearly half of those customers elected to add on cable TV and/or cellular service, both of which were for pay, and not free. Charter has been beating the industry as a whole for cable subscribers every quarter since Q3 2018.
The losses of cable companies continue to mount at dizzying levels for the industry. This is the sixth consecutive quarter where the industry lost over one million cable subscribers. The big providers collectively have lost 3.2 million customers this year, from a starting point of 79.3 million customers at the end of 2019.
It’s especially worth noting that these losses happened during a quarter when the biggest ISPs gained over 1.2 million customers for the quarter.
We’re likely going to have to wait to understand exactly what is happening in the cable industry. For example, a recent large survey from TiVO showed that 25% of US homes have downgraded to less expensive cable packages (cord-shaving). That would mean total revenue losses over and above what would be expected by just net customer losses.
Interestingly, homes don’t seem to be fleeing traditional cable for the online equivalents. Leichtman also tracks Hulu Live, Sling TV, and DirecTV Now and those three companies collectively lost 24,000 customers for the quarter.
Leichtman Research Group recently released the broadband customer statistics for the end of the second quarter of 2020 for the largest cable and telephone companies. Leichtman compiles most of these numbers from the statistics provided to stockholders other than for Cox, which is estimated. Leichtman says this group of companies represents 96% of all US landline broadband customers.
The second quarter shows big growth in broadband customers with almost one and a quarter million customers added to the big ISPs in the second quarter. However, due to the pandemic, those numbers need to be accompanied by an asterisk based upon several factors that are inflating broadband subscribers. Before discussing those issues, the following are the statistics for the first and second quarters of 2020.
6/30/20
2Q Change
% Change
1Q 20 Adds
Comcast
29,429,000
323,000
1.1%
477,000
Charter
28,096,000
850,000
3.1%
582.000
AT&T
15,201,000
(114,000)
-0.7%
(74,000)
Verizon
6,959,000
(23,000)
-0.3%
26,000
Cox
5,280,000
50,000
1.0%
60,000
CenturyLink
4,638,000
(29,000)
-0.6%
(11,000)
Altice
4,307,800
70,400
1.7%
50,100
Frontier
3,142,000
(41,000)
-1.3%
(33,000)
Mediacom
1,396,000
47,000
3.5%
21,000
Windstream
1,089,400
22,100
2.1%
18,000
Cable ONE
838,000
45,000
5.7%
21,000
WOW!
805,600
8,000
1.0%
16,100
Consolidated
791,203
5,078
0.6%
1,960
TDS
479,500
19,500
4.2%
4,800
Atlantic Broadband
478,689
6,000
1.3%
5,770
Cincinnati Bell
432,000
4,500
1.1%
1,800
103,363,192
1,243,578
1.2%
1,166,530
Total Cable
69,216,233
1,399,400
2.0%
1,231,970
Total Telco
33,184,925
(155,822)
-0.5%
(65,440)
Going purely by the numbers, the cable companies collectively added 1.4 million customers in the second quarter compared to the first quarter. However, there are some issues related to the pandemic that are inflating the second-quarter numbers. First, Charter alone added 160,000 free households during the quarter as the company kindly provided free broadband to homes with students with no broadband. But is a home that is not paying a broadband bill really a customer?
All of the ISPs on this list were not disconnecting customers for non-payment in the second quarter due to the pandemic. With tens of millions of people newly unemployed, it seems likely that the ISPs are going to be disconnecting a lot of customers when that policy finally ends. The ISPs all have to be discussing how long to extend that policy. It seems unrealistic that they will continue to provide free broadband to millions too far into the future.
I don’t think anybody, including the ISPs know how many customers they will lose as a result of the pandemic. We got something of a clue during the second quarter when almost 1.6 million households disconnected cable TV. A lot of that cord-cutting has to be coming from homes that could no longer afford to pay their cable bill. At some point there is going to be a reckoning and many of the gains shown in the first and second quarters of 2020 will be wiped out by homes that can no longer afford broadband.
But there is another industry story that is not reflected in these numbers. It seems that a huge number of homes have been upgrading to faster broadband speeds. OpenVault reported recently that at the end of the second quarter 4.9% of homes were subscribed to gigabit broadband products, more than double the 2.1% of gigabit subscribed at the end of the second quarter of 2019. Students and adults working at home have been finding that their existing broadband plans are inadequate for multiple people to connect to remote servers simultaneously.
The quarterly numbers continue to reflect the migration away from DSL. Many of the telcos showing customer losses have been actively adding customers on fiber, so DSL losses are a lot larger than are indicated by the net numbers above.
The largest traditional cable providers collectively lost over 1.7 million customers in the first quarter of 2020 – an overall loss of 2.2% in customers. This is the biggest overall drop in customers ever in a quarter. To put this loss into perspective, the big cable providers lost 18,800 customers every day.
The numbers below come from Leichtman Research Group which compiles these numbers from reports made to investors, except for Cox which is estimated. The numbers reported are for the largest cable providers, and Leichtman estimates that these companies represent 95% of all cable customers in the country.
Following is a comparison of the first quarter subscriber numbers compared to the end of 2019:
1Q 2020
4Q 2019
Change
% Change
Comcast
20,845,000
21,254,000
(409,000)
-1.9%
Charter
16,074,000
16,144,000
(70,000)
-0.4%
DirecTV
15,136,000
16,033,000
(897,000)
-5.6%
Dish Networks
9,012,000
9,144,000
(132,000)
-1.4%
Verizon
4,145,000
4,229,000
(84,000)
-2.0%
Cox
3,820,000
3,865,000
(45,000)
-1.2%
AT&T U-verse
3,440,000
3,440,000
0
0.0%
Altice
3,137,500
3,179,200
(41,700)
-1.3%
Mediacom
693,000
710,000
(17,000)
-2.4%
Frontier
621,000
660,000
(39,000)
-5.9%
Atlantic Broadband
306,252
308,638
(2,386)
-0.8%
Cable One
303,000
314,000
(11,000)
-3.5%
Total
77,532,752
79,280,838
(1,748,086)
-2.2%
Total Cable
45,178,752
45,774,838
(596,086)
-1.3%
Total Satellite
24,148,000
25,427,000
(1,029,000
-4.1%
Total Telco
8,206,000
8,639,000
(123,000)
-1.5%
Some observations of the numbers:
Note that AT&T no longer reports customers by division, so Leichtman has reflected all of their losses as DirecTV and shown no losses for AT&T U-verse.
The big loser is AT&T, which lost nearly 897,000 traditional video customers between DirecTV and AT&T U-verse.
The big percentage loser is Frontier that lost almost 6% of its cable customers in the quarter.
The big cable companies fared the best, but still lost 1.3% of their customer base in the quarter.
Satellite TV continues to dive and lost more than 4% of customers in the quarter.
Leitchman speculated that the magnitude of the losses could be due to the impact of COVID-19. However, the story seems to be a bit more complex than that. Several of the big companies reported about the same level of disconnects as in recent quarters but saw a big drop-off in new customers buying service. It’s worth noting that the above losses were experienced even while these same companies saw an increase of over 1 million new broadband customers in the same quarter- the best growth in broadband since 2015.
The full impact of COVID-19 will likely be seen in the next quarter. There has to be an impact from over 23 million newly unemployed people this year, as of mid-May. Cutting cable is one of the most obvious ways for a household to save money.
There may be evidence that COVID-19 had an impact by the end of March. Leichtman also tracks the subscribers of the online TV services that are owned by the above companies. Collectively, there was a loss of 319,000 customers by Hulu Live, Sling TV, and DirecTV Now. Additionally, Paystation Vue exited the market in the first quarter. However, YouTube TV is reported to be growing and had over 2 million customers by the end of February.
Losses of this magnitude have to be rolling downhill in the industry. These losses mean a lot lower revenues for cable TV networks. It means a lot less franchise revenues for local governments. It means lower advertising revenues from loss of eyeballs.
