[opendtv] Re: Leichtman Research: Major pay-TV providers lost about 405K subs in 3Q 2017, OTT pay-TV gained 535K
- From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Thu, 16 Nov 2017 06:01:12 -0500
On Nov 15, 2017, at 2:43 PM, Manfredi, Albert E
<albert.e.manfredi@xxxxxxxxxx> wrote:
The picture of OTT sites is very limited, since they only report on two
providers: Sling TV and DirecTV Now. However, an accelerating trend is still
clear. What is not clear is whether pay-TV overall is losing subscribers,
even though Leichtman says yes, because only two of the pay OTT sites are
considered.
The story has shifted Bert. As I have been telling you, it has shifted from
“cord cutting” to “cord switching. I was one of the “switchers” in the third
quarter.
As I have said for several years, the real issue was the availability of new
VMVPD services with all of the networks that people really want. Sling comes
close, but still lacks the most popular channel in the MVPD bundles - Fox News.
DirecTV came through with the right stuff, and clearly the service is now
growing very rapidly.
I’m not sure why they did not include Sony Play Station Vue, unless the numbers
are so low as to be meaningless. And Hulu Live arrived too late to have any
impact in the third quarter, but is likely to see the most significant
subscriber gains moving forward.
Including SVOD services would have been meaningless, as this report compares
apples and apples. The whole point here is that that the VMVPD services are
finally ready to compete. You can expect these numbers to grow rapidly now that
there are four viable choices.
I think we are well beyond this supposed "experimenting" phase, as the
self-soothers like to pretend.
We’ve been well beyond the experimental phase since the beginning of this
decade when broadband speeds and Netflix converged to provide an OTT service
that the masses were willing to pay for. But Netflix had limited impact on the
MVPDs, since there was no viable alternative online. In fact in five years the
majority of U.S. homes subscribed to both a MVPD bundle and Netflix.
It is quite telling that both of the VMVPD services included in the research
are owned by the DBS services. Dish actually gained 16,000 subscribers , as
they lost fewer satellite subscribers than they gained via Sling. Likewise
DirecTV gained 45,000 subscribers. It is less clear how this impacts the
bottom line; i.e. how much profit do they realize from a satellite subscriber
versus a VMVPD subscriber?
The bottom line Bert, is that there were still 92.2 million homes paying for a
(V)MVPD bundl at the end of the third quarter. Total U.S. homes are 119.6
million according to Nielsen, so the percentage of homes paying for (V)MVPD
bundles has now dropped to 77%.
It will be interesting to see what trends can be documented now that people are
switching to VMVPD services in significant quantities. My educated guess is
that another 5 million homes will switch over the next 12 months.
Regards
Craig
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