While TV network group executives may see dramatic 20% to 25% advertising revenue declines due to COVID-19 pandemic issues as temporary, pay TV network subscriber losses continue their chronic decline.
Pivotal Research Group estimates the pay TV industry lost two million subscribers in the second quarter -- a 10% increase in the loss of subscribers from a year ago.
While including new virtual/digital pay TV subscribers, this decline is at 1.6 million -- about the same as a year ago.
“We have never viewed vMVPD’s as particularly innovative and when factoring in higher standalone data pricing -- basically offering consumers fewer channels at roughly the same price without the quality of service,” writes Jeff Wlodarczak, media analyst for Pivotal Research Group. “The moment vMVPD’s try to normalize their prices they unsurprisingly bleed subs.”
At the same time, Wlodarczak adds, the pandemic has resulted in some help for troubled and economically challenged households keep some services. “Our view is that consumers stuck at home were temporarily less likely to churn off Pay TV boosted by government stimulus payments.”
Pivotal estimates that pay TV occupied household penetration was 61.0% -- down 2.7% from the first quarter. Adding in virtual pay TV services brings this number to 66% -- down 2.5% from the previous quarter.
Another loss of two million subscribers is expected next quarter.
Macquarie Research estimates pay TV losses across the top six publicly traded U.S. media companies -- AMC Networks, NBCUniversal, Walt Disney, ViacomCBS, Discovery, and Fox Corp.-- were down 8.5%. Related affiliate fee revenues fell an average of 2%.