Consumers continue to dump their cable and satellite subscriptions at an accelerated pace as the industry continues to see a fall in earnings across the board and for the first time ever, more people are watching on streaming than on cable.
According to the Hollywood Reporter, earnings are down for the second quarter.
“The second quarter of 2022 marked the second consecutive quarter with over 1.9 million net pay-TV losses,” stated Bruce Leichtman, who runs Leichtman Research Group, the Reporter noted. “Over the past year, top pay-TV providers had a net loss of about 5,425,000 subscribers, compared to a net loss of about 4,550,000 over the prior year.”
The analysis found that every major provider lost subscribers and revenue.
Pay-TV Cord-Cutting Accelerates As Cable and Satellite Providers See Losses Across the Board https://t.co/xg5GERHDWS
— The Hollywood Reporter (@THR) August 16, 2022
Comcast, Charter, Cox, Altice, DirecTV, Dish, Verizon and Hulu’s live TV, all lost subscribers. Comcast was down a whopping 500,000 subscribers while DirecTV was down 400,000.
Wells Fargo analyst Steven Cahall add that the 2,256,000 decline on subscribers is the worst fall on record. Cahall also noted that the industry has retracted from its original saturation point seen back in 2015.
“From a peak of more than 100 million in 2015,” Cahall wrote, “pay TV subs are now about 82.5 million, and we estimate penetration to be around 55 percent of TV households, down from a peak of 81 percent.”
Cahall went on to project an even larger drop in 2023 to 6.7 percent while 2024 will likely see a 6.9 percent decline.
The analyst concluded saying that cord-cutting has worse financial consequences for Fox Corp., Paramount Global, and AMC Networks due to their lack of diversity compared to companies such as Comcast and Disney.
“We think EBITDA sensitivity is highest for Fox, Paramount and AMC Networks,” Cahall said, “with around 1 percent per annum worsening to annual cord cutting negatively impacting calendar year 2024 EBITDA by 6 percent, 5 percent and 3.5 percent, respectively. These media names have little/no offsets to cord cutting.”
Finally, to compound the bad news for cable providers, for the first time ever more Americans have turned to streaming services for their entertainment than cable.
Streaming rose to 34.8% of total TV consumption in July, up about 23% since year and became the top way people get their entertainment. Meanwhile, cable and broadcast viewership both dropped, with the cable figuring in at 34.4% of viewing and broadcast came in at just 21.6%. Both are down around 10% over July of last year, according to CNN Business.
Streaming has briefly eclipsed broadcast TV before, but this is the first time it has beaten both broadcast and cable, Nielsen reported.