Pay television revenues in the United States reached their peak in 2015 at just over $100 billion but are forecast to fall to around $75 billion in 2023. However, that is only part of the story.
The rather gloomy figures from the widely reported North America Pay TV Forecasts from Digital TV Research show that cable, satellite and now telco television services are all losing subscribers and revenues.
The number of subscribers to traditional pay television in the United States is expected to decline from over 100 million in 2012 to about 80 million in 2023, when it will represent around two-thirds of television households.
“Much of this is due to the operators shifting their subscribers to online platforms,” observes Simon Murray of Digital TV Research. These virtual multichannel video programming distributors offer more flexibility at lower price points. “However, growth from vMVPDs is not expected to make up completely for the subscriber and revenue shortfalls from traditional pay TV.”
The informitv Multiscreen Index shows that the 10 leading pay-television services in the United States that report figures lost a total of 1.6 million subscribers in 2017, although they still have over 85 million between them.
They actually gained 84,600 subscribers in the last quarter of 2017, largely due to the online service DIRECTV NOW, which added over a third of a million customers, taking its total to over a million.
| Service | Change quarter |
Subscribers m |
|---|---|---|
| 84,600 | 85.23 | |
| Comcast | -38,000 | 21.30 |
| DIRECTV | -147,000 | 20.46 |
| Charter Spectrum | 2,000 | 16.54 |
| DISH Network | 39,000 | 13.24 |
| Verizon FiOS | -29,000 | 4.62 |
| AT&T U-verse | -60,000 | 3.63 |
| Optimum | -18,800 | 2.36 |
| DIRECTV NOW | 362,000 | 1.08 |
| Suddenlink | -5,600 | 1.04 |
| Frontier | -20,000 | 0.96 |
DISH Network broke out figures for its Sling TV online offering for the first time, accounting for well over two million, up by 711,000 in a year to around a sixth of its subscriber base, although the company lost 1.14 million satellite television customers.
“Sling TV and DIRECTV NOW are adding significant numbers of online subscribers but overall the traditional platforms are slowly leaking television customers,” noted Dr William Cooper, the editor of the informitv Multiscreen Index. “These two online services currently only represent 4% of the television subscribers to the top 10 services in the United States as ranked in the Multiscreen Index.”
Four of the five leading service providers in the United States maintained or increased their video service revenues from 2016 to 2017.
These five actually reported video revenue of over $100 billion between them both years, with a small rise from $101.66 billion to $102.58 billion. That includes internet revenues in the case of Verizon Fios.
If we combine video and internet revenue for the top five services, that rose from $135.33 billion in 2016 to $139.13 billion in 2017.
Of these five, only satellite operator DISH Network saw its revenue decline, from $15.21 billion in 2016 to $14.39 billion in 2017.
What we are actually seeing is a significant increase in revenue from internet access services, which are generally higher margin than pay television. One way or another, people are paying more for their television and video services.
The North America Pay TV Forecasts report is available from Digital TV Research. The Multiscreen Index is published by informitv.