U.S. Pay TV Down 5% In Q2, Sports Ratings Declines Add To Erosion

Cord-cutting continues to hit the traditional pay TV business at a steady pace: Total U.S. pay TV was down 5% in the second quarter of 2021, according to a new report.

Sports TV could be a major factor in continued erosion.

Traditional pay TV services dropped 7.7% -- a loss of 1.4 million U.S. customers, says MoffettNathanson Research.
New virtual pay TV providers didn’t stop overall subscriber declines, which only added back 227,000 in the period.

Total U.S. pay TV subscribers fell 4.6% for the quarter -- about the same level since the first quarter of 2020 -- to reach 84.5 million. Traditional pay TV subs came in at 72.6 million, while virtual pay TV was at 11.9 million.

The report questions whether live sports TV programming content will continue to be key in holding back overall accelerated pay TV declines.



In adding to the dramatic 42% decline for the Tokyo Summer Olympics this past summer, the research group says, all sports have seen ratings declines. This includes the NBA, NCAA Men’s Final Four Basketball Tournament, Major League Baseball, NHL, and the Masters.

MoffettNathanson says Major League Baseball on ESPN, for example, was down 39% to an average 888,000 viewers in 2019 from 2014. NBA on ESPN dropped 10% over the same time period to 2.6 million viewers.

Even the venerable NFL has taken declines over the last several years -- an 8% drop to 19.4 million average viewers in total TV content viewing across all platforms in 2019-2020 versus 2014-2015.

And there could be more to come -- especially if two big NFL TV partners move games to their respective new premium streaming platforms.

“Given the incredible importance of football to the linear bundle, the pace of pay TV erosion will only accelerate if the two remaining NFL rights holders who have held off putting their rights on an OTT platform — Disney and Fox — decide to follow in the footsteps of Comcast and ViacomCBS,” writes Craig Moffett, senior research analyst at MoffetNathanson.

All that would mean steeper subscriber declines in the U.S. pay TV industry.

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