Yikes: Cord cutting hits an all-time high
Pay TV subscriptions are down by 1.3 million through third quarter
November 15, 2016
Networks harrumphed the Nielsen numbers couldn’t possibly be right.
But it’s looking, more and more, like they were.
A new report from SNL Kagan, which provides quarterly pay TV subscription updates, finds that third-quarter subscribers fell once again, off 430,000.
That included big losses for telco subscriptions, which fell by 382,000, and smaller declines for cable.
Year to date, subscriptions have fallen by 1.3 million, the biggest first-to-third quarter loss on record.
That indicates an uptick in cord cutting. Some part of the quarterly losses are attributable to the shutdown of AT&T U-verse, many of whose customers are transitioning to DirectTV.
Cord cutting to save money
But mostly it’s a reflection of more and more people cutting their pay TV subscriptions in favor of free online entertainment options or lower-priced over-the-top options, such as Netflix or Amazon.
To what degree cord cutting has sparked pay TV declines has always been a subject of great debate, because the numbers reported by the cable, satellite and telco companies don’t include any context.
If, for instance, someone is moving to a new home and leaves Comcast for DirecTV, the subtext of that story isn’t reflected in the numbers. It simply notes one fewer cable subscription and one more for satellite.
Still, at this point the steady losses, dating back several years now, make it clear that cord cutting is a thing.
A change in methodology?
There’s growing push, however, to begin including over-the-top networks within these multi-channel subscriber reports, because these new options do include cable networks.
Vue, for instance, offers networks such as ESPN, HBO and FX, streamed OTT through PlayStation. But while subscribers pay to get the service, it’s not counted in the multi-channel subscribers logged by SNL Kagan.
Same goes for Sling, an OTT provided by DISH.
So while cord cutting may definitely be happening, it doesn’t necessarily mean people are abandoning pay TV entirely, some argue. The methodology needs to catch up, which is an argument made by ESPN to Nielsen.
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