By Jonathan Vanian
November 14, 2018

Cord cutting continues to take a toll on cable and satellite television.

The industry lost 1.2 million video subscribers in the third quarter, for a total of 91 million subscribers, according to S&P Global Market Intelligence’s Kagan research group.

The declining popularity of paid TV services come amid the rise of newer paid Internet-streaming services like Hulu and Google’s YouTube, which include traditional broadcasting networks and sports channels. Many traditional paid TV subscribers are canceling their service and instead switching to online equivalents.

The direct broadcast satellite sector was hit particularly hard, losing 726,000 subscribers during the three months ending Sept. 30, the report said. Kagan described it as that sector’s “worst quarter on record.”

Additionally, 94,000 subscribers dropped their telco TV packages during the quarter, with Verizon losing roughly 63,000 subscribers, the analysts noted.

In discussing cable alone, Kagan used a different yardstick—subscriber losses over the first nine months of 2018. On that longer basis, cable operators lost nearly 1.1 million subscribers, which Kagan noted marked “their worst performance at the three-quarter mark since 2014.”

In response to the losses, traditional broadcasting networks like ESPN are trying to do an end-run around paid TV providers by debuting their own paid subscription services. Even entertainment giant Disney (which owns a stake in ESPN) plans to introduce a streaming video service next year.

The Kagan report follows a recent eMarketer forecast that estimated that by 2021, roughly 51 million people will forego their cable or satellite TV subscription plans. Newer, cheaper television subscription plans from Dish Network’s Sling TV and YouTube were cited as a big reason for the expected drop.

And indeed some of those newer Internet services can be cheaper than the conventional TV subscription packages, as research firm cg42 noted in July. The report said that cord cutters typically pay $118 monthly for their services instead of $203 for traditional subscriptions.

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Kagan also noted that they now include Internet TV providers like Hulu, YouTube, Sony’s PlayStation Vue, and Sling TV in its tracking reports. This will help show how many people flee the traditional players to the newcomers.

Those newer services grew a combined 2.1 million subscriptions over a 9-month period, compared to the cable and satellite sectors which experienced a drop of 2.8 million subscribers, the report said.

 

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