Complete Story
09/08/2016
Cable TV Still Big Business Despite Cord-Cutting Trend
Every year for the past few years, second-quarter pay-television subscriber numbers have come out and people have started writing obituaries for the industry.
Since 2012, data from Leichtman Research Group (LRG), which aggregates pay-television subscriber totals each quarter, has shown that the industry takes a precipitous drop in Q2, followed by a smaller loss in Q3, then a rebound to end the year. The losses have been accelerating with both the second-quarter and year-end numbers getting worse, but the numbers have not even approached end-of-the-industry proportions.
Pay television as we know it may someday be a shell of its former self—like the record business or the newspaper industry—but those are areas that had steep fall-offs, and that has not happened in pay television no matter how many headlines play up the gloom-and-doom angle.
Cable added 380,000 subscribers in 2011, then added 170,000 in 2012 before turning to a loss in 2013 of 105,000, followed by a drop of 125,000 in 2014, and accelerating to a loss of 385,000 pay-TV customers last year, according to LRG. In every single year since 2012, when LRG began quarterly reporting, the industry lost subscribers during the second quarter. That includes 2012, when the year-end number was an overall gain.
You can see that the 2016 Q2 drop is bigger than previous-year numbers in that quarter, which may show cord-cutting accelerating. Or it might not. Even if you assume the year-over-year increase in Q2 reflects a big step up in people cutting the cord, past history indicates the numbers will slow in Q3 before the industry rallies in Q4. Overall, the rolling-12-month loss has just about doubled, according to LRG President Bruce Leichtman.
