Traditional pay TV declined by 2.3 million in Q2 2023, with vMVPDs capturing just 10% of the defectors. What will happen in Q3 with the strikes and NFL Sunday Ticket heading to YouTube?
Big TV channel bundle homes declined by 8 million over the last year
The decline in cable, satellite, and telco TV (traditional pay TV) continues accelerating. In the second quarter of 2023, providers lost 2.3 million subscribers, a decline of 3.7%. In the same quarter last year, the industry declined by 2.5%. The year-over-year decline also accelerated, from 8.1% in Q2 2022 to 13.3% in 2023. The industry finished Q2 with 60.9 million subscribers, down 
from 70.3 million in Q2 2022. There are now 46.8% of US homes with a cable, satellite, or telco TV subscription, down from 54.8% one year ago.
Virtual MVPDs managed to offset some of the losses. The industry added about 200,000 subscribers in the quarter to reach 15.2 million, up by 1.6 million from Q2 2022. Adding vMVPDs and traditional pay TV subscribers shows 76 million US homes with a big bundle of TV channels. The number of big TV bundle homes decreased by 2 million (-3%) for the quarter and is down by about 8 million (-9%) over the last year.
YouTube TV is now the fifth largest (v)MVPD in the US
For the first time, the total number of vMVPD provider subscribers exceeded the largest traditional pay TV service, Comcast Xfinity TV. The top three vMVPDs are among the top nine big bundle providers. With about 6.3 million subscribers, YouTube TV is the fifth largest big bundle provider in the US. Hulu+Live, with 4.3 million, is the sixth largest, and Sling TV, with 2 million, is the ninth.
Alphabet does not provide regular updates on the number of subscribers to YouTube TV. However, industry estimates suggest it is still growing, while all the other major providers are not. Estimates put the number of subscribers to the service between 5.9 million and 6.6 million. The service could continue to grow in the third quarter while many others decline.
Strikes amplify the importance of sports in the third quarter
The writers’ and actors’ strikes have greatly impacted television’s fall season. Many shows are delayed indefinitely while the strike continues, and were it settled tomorrow (and it won’t be), the damage has already been done. Sports programming is one of the few categories unaffected by the strike and could greatly impact subscriber numbers.
One beneficiary is liable to be YouTube TV. YouTube has purchased the rights to NFL Sunday Ticket starting with the 2023/2024 season. Though potential customers can buy access through YouTube, there are two primary reasons to believe most will subscribe via YouTube TV:
- It costs $100 less to subscribe via YouTube TV
- Access to in-market games requires local TV channels, which YouTube TV provides.
NFL Sunday Ticket could help YouTube TV reach fourth place in the (v)MVPD rankings above Dish Network in the third quarter. Fubo may also continue to grow due to its sports focus.
Philo does not provide access to local channels and omits news and sports channels. Sling TV provides access to only a few local channels, though it has popular sports and news channels. The strikes could negatively impact both services.
The impact on traditional pay TV is unclear. Cable, satellite, and telco TV provide local NFL games access. However, the loss of many fall season programs reduces the value of the rest of the big bundle. Perhaps more people will switch to free over-the-air TV for their local games, and the traditional pay TV rout will continue.
Definitions
Traditional pay TV – cable, satellite, and telco TV services
vMVPD – virtual multi-video programming distributor (e.g., YouTube TV, Hulu+Live)
MVPD – Multi-video programming distributor (e.g., Comcast Xfinity TV, DirecTV)
(v)MVPD – MVPDs and vMVPDs, also described as big TV channel bundle providers
Big TV channel bundle – (v)MVPD services provide a big bundle of TV channels to subscribers for a single price.
