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Cord cutting triumph: Pay TV industry hit with record subscriber losses

August 15th, 2015 at 9:30 AM
Cord Cutting Pay TV Subscribers

The traditional pay TV bundle is slowly dying. New data released by research firm SNL Kagan this week showed that pay TV services lost a total of 625,000 subscribers last quarter, which is the largest quarterly loss in the industry’s history. While the pay TV industry typically loses subscribers in the second calendar quarter ever year, this year’s losses absolutely dwarfed the 352,000 net customer loss that pay TV services posted in Q2 2014.

RELATED: Pay TV stocks are getting hammered and it’s all thanks to cord cutters

Source: SNL Kagan

This big subscriber loss is just one more data point showing that traditional pay TV services are getting significantly disrupted by the rise of online content streaming. Major media companies’ share prices have been taking an absolute beating lately as their investors have realized that content providers will no longer be able to keep jacking up rates they charge cable companies for the rights to broadcast their content.

This downward pressure on licensing prices is coming both from over-the-top streaming services such as Netflix and Hulu, and also from cable companies that are pushing content providers to accept “skinny” bundles that offer consumers cheaper monthly rates for more tightly focused packages of channels.

The transition from giant pay TV bundles to smaller, less expensive individual streaming services will take a while but at this point it’s inevitable, especially since younger consumers have shown that they don’t want to pay $100 a month for hundreds of channels they never watch. That said, we shouldn’t feel too sorry for traditional pay TV companies — after all, Comcast, Time Warner Cable and others still control the Internet infrastructure that these services get streamed over, so they’ll still make money one way or another.

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