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Pay TV Nears 1 Million Subscriber Losses in 2Q: ‘Worst Quarterly Loss Ever’

9 Aug, 2017 By: Doug McPherson

NEW YORK – Media analysts’ fears of subscriber losses for pay TV have now been realized: losses nearly hit 941,000 – a 2.7 percent drop – during the second quarter. Craig Moffett, senior media analyst at MoffettNathanson Research, called it “the worst quarterly loss ever.”

One silver lining: prior to the final results being reported, analysts had estimated 1 million to 1.2 million losses. But the third quarter could be worse. ”Will those losses accelerate to 4 percent, 5 percent, or even 6 percent per year? There is, unfortunately, no road map,” Moffett says.

Dish Network reported slightly better than anticipated video subscriber losses of 196,000 in the second quarter, with the continued erosion of its core satellite TV business shrouded once again by the undisclosed growth of its virtual MVPD (VMVPD) platform, Sling TV.

Analysts covering Dish had expected losses to the satellite platform to come in as high as 370,000.

While Dish – and the broader pay-TV business, for that matter – seem to have avoided a cataclysmic cord-cutting catastrophe in the second quarter, business is not great in Englewood, Colo. Revenue was down nearly 6 percent to $3.64 billion, with net income declining more than 90 percent to $40 million, the result of litigation expenses, Dish said. 

Dish’s pay-TV subscriber base has shrunk 2 percent year over year to 13.332 million, with the lower-margin Sling TV platform driving average revenue per user from $89.98 in second-quarter 2016 to $87.25 in 2Q 2017, a 3-percent drop. Dish also reported 141,000 fewer net additions in the quarter.

 “To put it politely, the data sucks,” Moffett said in his note to investors last week. “Some VMVPDs report data, some don’t. Some include free subscribers still in their promotional windows, and some don’t. Some are included in recent periods but not in older ones. So take the VMVPD data with a grain of salt.”

Analysts had pegged overall second-quarter attrition to exceed 1 million subscribers, with Wells Fargo’s Marci Ryvicker suggesting it could go as high as 1.28 million. 

The biggest losers in the second quarter were the satellite platforms. Aside from Dish’s losses, AT&T said last week that its linear DirecTV service lost 156,000 users in the second quarter. 

AT&T, meanwhile, said that its sinking U-verse platform lost another 195,000 TV users. 

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