QoQ change in pay-TV subscribers:
1) Traditional pay-TV – ↓ 1.1M
2) Streaming pay-TV – ↑ 1.6M
3) Total pay-TV – ↑ 485K
Traditional pay-TV subscriptions (YoY growth):
1) 2018-Q3 – 86.1M
2) 2019-Q3 – 81.0M (↓ 6%)
3) 2020-Q3 – 74.9M (↓ 8%)
Streaming pay-TV subscriptions (YoY growth):
1) 2018-Q3 – 6.0M
2) 2019-Q3 – 8.1M (↑ 35%)
3) 2020-Q3 – 11.5M (↑ 41%)
Total pay-TV subscriptions (YoY growth):
1) 2018-Q3 – 92.1M
2) 2019-Q3 – 89.1M (↓ 3%)
3) 2020-Q3 – 89.6M (↓ 3%)
Subscription combinations, according to Leichtman Research Group:
1) SVOD + pay-TV – 60%
2) SVOD only – 20%
3) Pay-TV only – 14%
4) Neither SVOD nor pay-TV – 6%
Yikes: Network execs expect traditional pay-TV households to drop to 50M (↓ 25M) by 2025.
Quick math: 25M households leaving pay-TV = $25B in lost revenue from subscriptions alone!
Big question #1: Can streaming make up the difference?
Quick answer: Unclear. Doug Shapiro breaks down the economics of shifting from traditional pay-TV to streaming in a must-read article.
Why this matters: Traditional pay-TV subscriptions are declining at an increasing rate, and revenue from streaming is not offsetting (yet).
Share of national video revenue:
1) Traditional TV – $100B (84%)
2) Streaming TV – $19B (16%)
3) Total TV – $119B
Quote from Doug Shapiro – Former Chief Strategy Officer @ Turner Broadcasting:
“Pay TV is more than a bundle; it is a bundle of a bundle of bundle of a bundle. TV episodes are bundled into series; series are bundled into networks; networks are bundled into a pay TV package; and the pay TV package itself is a bundle of content and distribution (at least when it is provided by a facilities-based distributor like Comcast or DirecTV). Thanks largely to the advent of streaming, all of these components can be purchased separately today. What is effectively at work right now is the unbundling of the TV bundle.”
Big question #2: Which networks are at greatest risk in the shift to streaming?
Quick answer: The networks with the highest cost compared to the share of consumer attention.