• by Wayne Friedman , May 7, 2019

Cable, satellite and telco-based TV companies are not converting a majority of traditional pay TV subscribers to new virtual pay TV subscriptions. One analyst says the trend is getting worse.

MoffettNathanson Research says only 40% of the 1.4 million traditional pay TV subscriptions lost in the first quarter were “recaptured” by new virtual multichannel video program distributors (vMVPDs). It was 59% over the last 12 months.

Craig Moffett, media analyst of MoffettNathanson Research, points to a number of possible reasons -- password sharing, increasing over-the-air broadcast TV antenna use, and a contraction of accounts for two-home households.

“Perhaps most importantly, [there’s] a growing belief among certain demos — especially among non-sports enthusiasts... that SVOD [subscription video on demand] alone is sufficient,”  he adds. The latter would include Netflix, Amazon and Hulu.

As of the first quarter, Moffett estimates the total vMPVD universe at 8 million subscribers, rising by 563,000. Hulu with Live TV grew the fastest, adding 400,000. Other gainers in the group include YouTube TV, Sling TV and DirecTV Now.

When looking at the total pay TV universe -- traditional pay TV services and new mVPDs -- there was a 1.9% decline to 95.6 million subscribers in the first quarter, accelerating the 1% drop in the fourth quarter 2018, and 0.5% decline in the third quarter of 2018.

Total pay TV growth was flat in the second quarter of 2018.

Traditional pay TV services had their worst period ever in the first quarter in terms of lost subscribers and a percentage decline -- dropping 1.4 million subscribers, among to a 4.8% fall. MoffettNathanson now estimates there are 87.6 million traditional pay TV services (cable, satellite and telco) subscribers.