Traditional pay TV lost 2 million subscribers in the first quarter of the year and is on target to decline another 12% by the end of 2024. Could the introduction of competitor SVOD bundles slow the trend?
MVPDs lost 2 million subscribers in Q1 2024
US Cable, satellite, and telco TV providers (multi-video programming distributors, MVPDs) lost 2 million subscribers in Q1 2024, a decline of 3.4% from Q4 2023 and 12.5% from Q1 2023. Though bad, the performance improved over Q1 2023, when operators lost 2.5 million subscribers, a quarterly decline of 3.9%. That said, the industry is on pace to lose more than 12% of its subscribers in 2024.[i]
Of the operators reporting Q1 2024 results, Dish Network saw the largest percentage decline in the quarter, losing 3.7% of its satellite subscribers. Comcast experienced the largest subscriber loss, losing 0.5 million (-3.6%). Charter declined slightly less (-2.9%) in the quarter and is now the largest traditional pay TV provider, with 13.7 million.
vMVPD results were mixed
Each of the three vMVPDs reporting on subscribers each quarter – Hulu+Live, Fubo, and Sling TV – lost 100,000 or so subscribers. The biggest provider in the segment, YouTube TV, did not give an update on customer numbers. However, past trends suggest its growth more than offset the losses from Hulu, Fubo, and Sling TV. The number of vMVPD subscriptions finished up slightly at 18 million.
The penetration of pay live TV in US homes falls to 56%
The proportion of homes with a traditional pay TV subscription was 42% at the end of Q1 2024. One year ago, penetration was 48%, and in Q1 2020, penetration was 67%. vMVPD penetration was 14%, compared to 12% in the same quarter of last year and 7% in Q1 2020.
The pay live TV bundle (traditional pay TV and vMVPDs together) reached 56% of US homes at the end of Q1 2024, down from 60% one year ago and 74% at the beginning of the decade.
If MVPD and vMVPD trends remain the same for the rest of the year, the penetration of US homes with pay live TV bundles could fall to 50% or less by the end of the year. But perhaps the current trend of competitor SVOD bundles can significantly slow the decline.
Will bundles slow or reverse the video subscriber exodus?
Bundles have been very much in the news over the last few weeks. Disney and Warner Bros. Discovery will offer a Disney+, Hulu, and MAX bundle. Paramount Global is rumored to be in early talks with Amazon about creating streaming bundles. However, perhaps the biggest announcement came from Comcast. It says it will offer its video, broadband, and mobile subscribers a discounted bundle of Netflix, Apple TV+, and Peacock. So, will this bundle have a transformative effect on the decline of Comcast’s video business? Not likely.
Comcast sees its highly profitable broadband business under attack from fixed wireless carriers like Verizon and T-Mobile. Comcast’s broadband business lost subscribers for the last four quarters, a first for the company. The churn-busting power of a discounted SVOD bundle that many customers would find compelling could be enough to convince the small number of quitting customers to stay. It could also convince mobile customers from the likes of Verizon and T-Mobile to defect to Comcast wireless in areas where it is offered.
At this point, Comcast’s video business contributes very little to the company’s profit. The company has stated unequivocally that it is uninterested in keeping unprofitable video subscribers. When a subscriber calls to cancel video service, the agent will do nothing to stop them unless they are canceling broadband, too.
In other words, the Netflix-Apple TV+-Peacock bundle might have a small impact on the decline of video subscribers in the short run. However, it is incidental to the real goal of retaining broadband subscribers. Moreover, the bundle could accelerate the decline of the traditional video business in the long run.
In the coming months, expect to see other cable providers seek to defend their broadband businesses with their own bundles.
[i] MVPD and vMVPD data in this opinion piece was gathered from company quarterly reports and from nScreenMedia’s analysis of this and other data.
