US Pay TV penetration drops to two thirds with 6 million subs cutting cord in 2019

US pay TV providers lost 6 million subscribers in 2019.

According to analyst MoffettNathanson, the alarming loss represents a 7% year-over-year decline in paying subscribers, with Q4 alone seeing 1.5 million households cut the cord.

AT&T was the biggest loser in Q4, losing 1.16 million paying TV subs. Comcast saw a dip of 149,000 while Charter lost 101,000 subscribers.

The decline is less serious when including alternative IPTV providers such as Hulu With Live TV and YouTube TV, with that softening the blow to a loss of 3.6 million household losses. These virtual players saw subscriber numbers increase from 7.52 million to 9.96 million year-over-year.

This is a significant contrast to the market in 2009, where pay TV penetration was at an all-time high of 87.8%. This figure now stands at 65.3% of US homes.

An analyst at the firm said: “Operators across the pay-TV distribution map are reassessing video strategies, and they are universally shifting, albeit to varying degrees, towards strategies that accommodate, or even encourage, cord-cutting. As video distributors change their pricing and marketing strategies, the media industry is finally facing that long-feared moment of accelerating cord-cutting.”

The figures come at a time when many traditional pay TV providers in the US are restructuring their offers to focus on OTT. This is most obvious for AT&T and Comcast, which are to release their HBO Max and Peacock streamers respectively during the first half of the year.

While launching with different pricing and content strategies, both big-budget streamers will be provided to existing subscribers for free in a move that AT&T COO and WarnerMedia chairman John Stankey said will “have a positive and immediate impact on the stickiness of our wireless and pay TV and broadband offerings.”