Pay TV Universe Continues to Decay, Analyst Wieser Says

The number of pay TV households continues to fall, according to an analysis of the latest Nielsen data by Brian Wieser of Pivotal Research Group.

Wieser said Nielsen estimates of the pay TV universe for June show a decline of 2.9%, a dip that comes despite a 1.7% increase in total TV households. That total includes only traditional cable, satellite and telco subscribers.

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The cable universe numbers are studied for clues about the health of the pay TV business, which has been under pressure from cord-cutters looking to save money by dropping their subscribers and younger cord-never consumers.

Data on virtual multichannel video programming distributors (vMVPDs) such as Hulu and DirecTV Now are only starting to come in. Wieser said that for June a broader Nielsen measure called “Total Cable Plus” adds about 1.3 million homes to the total.

“VMVPDs would reduce the decline, although probably not by much more than a percentage point or so,” Wieser said in a report Tuesday (May 30).

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Among the companies that own cable networks, Discovery, Disney, Comcast-NBCU, Scripps Networks, Time Warner and Viacom were all down abou 3%. Fox was down less than 2%, while AMC Networks was up 9.9%, Wieser said.

The networks taking the biggest lumps included Boomerang and CMT, each down 9.6%. Other secondary networks, including Destination America, Science and DIY, also showed declines of more than 7%.

Disney’s closely watched ESPN and ESPN2 were down 3.8% and 3.7%, respectively.

Wieser said that data from the virtual MVPDs suggest the companies with the biggest network portfolios, NBCUniversal and Viacom, have lower penetration on the new distributors. NBC’s media network is picking up only 0.5 million subscribers, and Viacom is adding only 0.3 million.

Viacom has been excluded from a number of vMVPD packages, including Hulu and YouTube TV.

“Despite the gloomy story generally conveyed by this data, we think an underappreciated positive story lies in the data not explicitly included in Nielsen’s Universe Estimates," Wieser wrote. "Broadcast networks’ growth in penetration effectively matches the rise in TV households, meaning that if we were to look at ABC, CBS, The CW, Fox and NBC we would see gains of around +1.7% year over year. This growth in penetration provides support to viewing levels at those networks, at least to the extent that viewing arrives there by default when broadcast-only homes choose to watch linear TV.”

Jon Lafayette

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.