US Cable Companies Lost 5 Million Paying Customers Last Year Alone

from the denial-isn't-just-a-river-in-Egypt dept

For most of the last decade, cable and broadcast industry executives insisted that "cord cutting" (users cancelling traditional TV and moving to antennas or streaming) either wasn't real or was only something losers did. Many of the analysts and viewer tracking firms (like Nielsen) -- which have a financial stake in telling cable and broadcast executives what they wanted to hear -- were quick to happily parrot these denials.

Now that it's impossible to deny the trend, most of those folks have become notably quiet.

This week Leichtman Research took a final look at 2019 earnings reports for the biggest cable companies and it wasn't particularly pretty for the sector. All told the top pay TV providers in America, representing about 95% of the market, lost about 4,915,000 net video subscribers in 2019--compared to a loss of 1,585,000 subscribers in 2018. Satellite TV providers were particularly hard hit last year.

Among the biggest hit was AT&T's DirecTV, which lost 3,190,000 subscribers last year alone. Most of those losses were courtesy of the rate hikes AT&T imposed on its customers to pay off the debt it accumulated after spending $150 billion on megamergers in the last five years alone (DirecTV in 2015, Time Warner in 2019). Instead of dominating the space as AT&T had hoped, it "enjoyed" a revolt from customers and investors alike.

But things weren't much better for the cable sector, which collectively lost 1,560,000 video subscribers in 2019 -- compared to a net loss of about 920,000 subscribers in 2018. Or the nation's traditional phone companies like Verizon and AT&T (who also offers TV service via IPTV), who lost 665,000 subscribers last year -- compared to 245,000 the year before. Even the companies that tried to at least somewhat get ahead of the trend (like AT&T) wound up paying the price, even losing subscribers from their new streaming TV platforms due to rate hikes.

It's always been pretty clear that most cable TV providers intend to ride this cash cow until its last gasp before doing obvious things like shoring up historically terrible customer support or actually competing on price. And to some degree, you can understand why. The traditional pay TV sector is still home to a whopping 86.2 million subscribers with the top seven cable companies still laying claim to 45.8 million video subscribers, satellite TV services 25.4 million subscribers, and the top telephone companies 8.3 million subscribers.

And while streaming will continue to slowly erode these totals, these companies all have an ace in the hole: their growing monopolies over broadband. The lack of US competition means that as margins on TV get tighter, they can simply squeeze their captive broadband customers tighter, something that usually manifests in not just vanilla price hikes, but the steady growth of bullshit fees, usage caps, and utterly arbitrary and unnecessary usage caps and overage penalties.

Filed Under: cable, cord cutting, tv

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  1. identicon
    Iggy, 12 Mar 2020 @ 7:54am

    I'm still paying for Cable TV and I never use it. My building has a contract and the only way to access the internet is using an Internet/Cable package for $100 per month.

    They're not losing any paying "customers"

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