Some interesting stats and comments in this article. And it looks like we may
have an idea about the number of subscribers for Dish Sling - about 536,000 if
we can believe the Leicthman study.
Enjoy!
Regards
Craig
http://www.fool.com/investing/general/2016/03/13/how-big-was-cord-cutting-in-2015.aspx
How Big Was Cord Cutting in 2015?
Cord cutting more than doubled in 2015 compared to 2014, but the pattern by
which pay-television providers lost and gained customers suggest the trend
might be sputtering out.
Last year, the 13 largest pay-TV providers in the United States, which between
them cover about 95% of the market, lost 385,000 net video subscribers,
according to Leichtman Research Group (LRG). That's more than twice the 150,000
subscribers lost in 2014 and nearly four times the 100,000 paying customers the
industry said goodbye to in 2013.
On the surface, that would suggest that the rate at which people are dropping
pay-TV for cheaper streaming alternatives has accelerated. But in fact, the
trajectory shifted sharply during the fourth quarter of 2015. During the final
three months of the year, the pay-TV industry gained hundreds of thousands of
subscribers, cutting a loss of roughly 650,000 customers through the first
three quarters to just 385,000 for the full year.
"2015 marked the third consecutive year for pay-TV industry net losses, yet the
total number of subscribers for major pay-TV providers (including DISH Sling
TV) has declined by less than one million since the industry peaked in 1Q
2012," said LRG President Bruce Leichtman,
The picture those numbers paint is unclear. It's possible cord cutting is still
slowly building steam, and the last quarter was simply an anomaly. It's also
possible that the industry hit bottom and has started to recover.
A look at the numbers
The biggest shift was that the major cable companies, including Comcast, Time
Warner Cable, and Charter Communications, saw their losses slow markedly, while
the major telephone company providers saw defections accelerate.
The top nine cable companies lost about 345,000 video subscribers in 2015, a
major improvement from the 1,215,000 subscribers they shed the previous year,
according to LRG. AT&T and Verizon, by contrast, lost 125,000 video subscribers
in 2015, after net gains of about 1,050,000 subscribers in 2014. It was the
telco segment's worst performance since 2006, the research firm reported.
Satellite providers also had what could be considered a down year. Even though
DISH and DirecTV (which is now owned by AT&T) gained 86,000 subscribers in
2015, up from 20,000 in 2014, without the gains from low-cost Sling TV, the
satellite segment would have lost 450,000 net customers. Of course, we can't
know whether or not those Sling customers might have opted for a more expensive
package had the skinny bundle not been an option, nor how many of them were
downgrading from pricier packages as opposed to being cord-nevers coming on
board.
"The top cable providers cumulatively had their best year since 2006, and had
about 870,000 fewer losses than in 2014," Leichtman said. "Telcos had about
1,170,000 fewer net additions than in 2014, and had their worst year since they
began providing video services in 2006."
Source: LRG
Making sense of the chaos
Parts of the pattern of gains and losses make a little more sense when you dig
a bit deeper. AT&T U-Verse, for example, was a big loser as AT&T shifted some
of its customers to DirecTV, which gained subscribers.
One can also see why full-price cable companies gained even as the often
cheaper (at least during promotional periods) telco and traditional satellite
services suffered. It seems likely that people seeking a better deal would opt
for the major savings of cutting the cord (or going with Sling) rather than
saving only a few dollars by opting for a slightly cheaper satellite or telco
provider.
During the fourth quarter, it seems like there was a rush toward full-priced,
full-service cable companies among the people looking to shell out for pay-TV.
That squeezed the lower-end of the traditional market, while also creating an
audience for Sling TV.
Going forward it seems like cord-cutting may have stalled. At the very least,
the overall percentages on a multi-year basis remain relatively small. That's
not to say that the threat to the pay-TV industries has subsided, but it
suggests that at worst, it's going to be a slow-growing problem.
The data also shows that the answer for pay-TV providers may not simply be
going cheaper. For big cable, there is clearly value in offering a premium
service at premium prices. For pay-TV company shareholders, this news should be
heartening, because it shows that there is a high perceived value for cable
among a large percentage of consumers. And that means the end of the industry
is not nearly as imminent as many have predicted.