Although pay TV subscribers continue to see steepening declines, affiliate fees going to TV network groups are still growing in the near-term.
Todd Juenger, media analyst at Bernstein Research, says 70% of the pay TV system -- from pay TV services through AT&T, Comcast, Charter and Verizon -- together has seen a tripling of subscriber declines so far in the third quarter of this year to a 1.74 million net loss in video subscribers.
This compares to a loss of just 520,000 in the prior year for those companies. AT&T, with its DirecTV and AT&T TV Now, is the major reason -- down 1.4 million.
At the same time, Juenger says, affiliate fee revenues to TV networks continue to grow in the low/mid-single-digit percentage range as a result of existing deals with regular price hikes.
For example, AT&T reported yesterday that for its Turner TV network unit. affiliate revenue rose 4% in the third quarter to $1.9 billion. Last year, NBCUniversal cable networks posted a 12.3% increase in all distribution revenue to $6.8 billion.
“Our view on the likely victims of that trend has changed to be more uniform across the network groups. We used to believe the 'day of reckoning' would come when the weakest network groups would get priced down or dropped. That is indeed happening to some extent at Viacom.”