• by Wayne Friedman , February 20, 2020

New digitally delivered pay TV services' subscriber growth slowed in 2019, which didn’t help the overall pay TV universe out of its continuing subscriber decline trend.

So-called virtual pay TV providers -- Sling TV, AT&T TV Now, and others -- now collectively total 9.96 million subscribers, adding 630,000 subscribers in the fourth quarter of 2019 versus the third quarter, according to recent estimates from MoffettNathanson Research.

The third quarter of 2019 added 676,000 subscribers from the previous quarter, while the second quarter grew 518,000 from the first quarter.

A year ago, streaming digital pay TV providers were at 7.5 million.

By way of comparison, total traditional pay TV providers--  cable, satellite and telco -- were down a big 6.8% in the fourth quarter versus the same period a year ago to 82.99 million -- the steepest decline ever.

MoffettNathanson says the whole traditional pay TV business lost six million subscribers last year.

In the fourth quarter, satellite pay TV services were down 13.1% (25.3 million), while telco-based pay TV providers were off 6.3% (8.5 million) and cable operators lost 3.3% (49.1 million).

Adding in new digital pay TV providers did not help. The total pay TV universe, traditional and digital, still lost 3.8% in 2019 -- 864,000 in the fourth quarter, to end 2019 with 92.95 million subscribers.

Over the past decade, traditionally delivered pay TV penetration fell over 20 percentage points to 65.3% of U.S. homes in the fourth quarter of 2019 from 87.8% in the first quarter of 2010.

The data trend here is actually worse than it appears when factoring in the stronger growth of household formation additions in recent years, analysts Craig Moffett and Michael Nathanson write.

For 2019, TV distributors realized that cord-cutting is here to stay. Moffett and Nathanson write:

“The most important development we see in video isn’t that cord-cutting is being embraced by consumers. It’s that cord-cutting is being embraced by video distributors.”