Cord-cutting by traditional pay TV subscribers in the first quarter reached new levels of decline -- the worst-ever subscriber quarter loss so far, according to new research.
MoffettNathanson Research says an estimated 762,000 subscribers abandoned traditional pay TV packages in the first three months of this year -- a 2.4% drop. This compares to a decline of 141,000 in the first quarter of 2016.
What about all those new virtual multichannel video programming distributors (VMVPDs)? Adding in DirecTV Now, Sling TV -- new digital businesses from traditional pay TV providers -- didn’t help. This still resulted in an overall 1.3% decline, a loss of 459,000 subscribers.
Craig Moffett, partner/senior analyst of MoffettNathanson Research, is worried.
“This was supposed to be the quarter that media bounced back,” he writes. “This was supposed to be the quarter where media showed that they will be fine, thank you very much, in a world of virtual MVPDs.”
Making matters worse, this first quarter witnessed the first rise in new household formation in the past four first quarters, according to the U.S. Census Bureau -- 157,000 new households were formed in the first three months of the year.
“Under normal circumstances, roughly 80% of those new households would signed up for pay TV. Where are they?” he asks.
Moffett suggests: “The most likely explanation for the fact that many subscribers are just disappearing altogether points to a more sinister explanation. Password sharing... or, less politely, piracy.”