Cord-cutting continues to get worse, with the linear video industry suffering its biggest quarterly losses since COVID-19 knocked out live sports and scripted programming, according to new figures from MoffettNathanson.
Traditional pay TV distributors lost 9% of their subscribers year over year in the first quarter of 2022. The 9% rate of decline compared to 8.9% in the fourth quarter of 2021 and ties the worst level ever, set in Q1 2021.
Virtual MVPDs aren’t picking up lapsed pay TV subscribers the way they used to either, contributing to a worsening picture for the traditional pay-TV bundle. In the first quarter, the conversion rate fell to 32.8% from 35.6% in the fourth quarter.
When looking at traditional and virtual pay TV distributors combined, subscribers were down 5.1% year over year, close to the all-time worst of 5.5% set in the second quarter of 2020, when COVID knocked out new scripted shows and most live sports.
In all, the linear video industry lost 2.1 million subscribers in the first quarter, the worst since Q1 2020.
Looking at company reports, MoffetNathanson said the biggest losers of subscribers in the first quarter were Comcast, down 511,00 and DirecTV down 496,000. DirecTV, spun off from AT&T last year, reported its latest subscriber numbers to bondholders and debt analysts.
Including estimates for some outfits that don’t publicly report numbers, MoffettNathanson said the Q1 performance left the linear TV business with 81.048 million subscribers.
Cable had 41.661 million subscribers, down 6.9%, satellite had 18.5 million subscribers, down 12% and the telcos had 5.829 million subscribers, down 13.5%.
Total traditional subscribers were 66.118 million, down 9% and the virtual MVPDs had 14.930 million subscribers, up 16.7%.
“The rate of decline of the linear business is not something that ‘just happens,’ “ noted the research firm’s principals, Craig Moffett and Michael Nathanson. “Many of the media companies have made conscious decisions to strip-mine their cable networks, shifting their best content to their streaming platforms.
“At the same time, they have raised prices relentlessly to offset declining viewership. Both strategies have alienated distributors, who are now more ambivalent than ever about trying to retain video subscribers who are themselves increasingly ambivalent about lower and lower quality video services for which they are asked to pay higher and higher prices,” Moffett and Nathanson said.
Several sports leagues have started to put games on streaming platforms, a trend that may accelerate, further hurting the linear TV business, which was expected to be supported by live programming, including news as well as sports.
“Including vMVPDs, the rate of decline for linear video is hovering near its all-time worst levels,“ Moffett and Nathanson wrote. “And the rate of decline for traditional distributors is the worst it has ever been. That’s not what one would expect if we were gliding towards a stable sports-and-news floor.” ■
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.