The top three service providers in the United States lost over 900,000 traditional television subscribers between them in the last quarter of 2020. They lost a total of 4.54 million or 8% of their combined subscriber base over the course of 2020. Yet they do not appear to be particularly troubled by this. The consistent message from these service providers is that they are focussing on high-value customers, while transitioning them to services delivered over their broadband networks.

Comcast lost almost 1.30 million residential television subscribers in 2020, ending the year with a total of 18.99 million.

Comcast 2020 Q4 change. Source: informitv Multiscreen Index / company reports.

AT&T lost almost 3.00 million premium television subscribers and 270,000 online subscribers over the year. At the end of 2020 it had 16.51 million premium satellite and fibre subscribers and a further 656,000 online. Premium television losses were lower in the second half of the year, at 617,000 in the fourth quarter, compared to 897,000 in the first quarter.

ATT Premium TV 2020 Q4 change. Source: informitv Multiscreen Index / company reports.

Charter Communications lost 66,000 residential television subscribers in the fourth quarter of 2020 but managed to gain 19,000 over the year, compared to a net loss of 484,000 the previous year, ending with a total of 15.64 million.

Charter 2020 Q4 change. Source: informitv Multiscreen Index / company reports.

Between them, these three leading service providers lost 4.54 million subscribers between them in 2020. They still have 51.79 million, but that is 8% fewer than they had a year before.

Comcast described its fourth quarter results in cable as “outstanding” and “nothing short of exceptional”, pointing to 515,000 additional residential broadband customers. Comcast added 1.94 million residential broadband customers in 2020, giving it a total of 28.35 million. That is 9.36 million more than it has television subscribers. With just 50% penetration of its footprint, the company says there is plenty of opportunity for future growth. Revenue from providing internet access is now approaching that for video and was up by nearly 10% to $20.60 billion in 2020, compared to $21.94 billion for video, taking total cable revenue for the year to $60.05 billion.

“Our video strategy is centred on profitability,” explained Michael Cavanagh, the chief financial officer. “We do not chase unprofitable video subscribers as we can now offer Flex for free to those who prefer a streaming-only entertainment option.” Flex is an online video service that is offered free to broadband only customers.

Brian Roberts, the chief executive, described Flex as “the whole articulation of the company’s strategy with broadband and aggregation into streaming”.

Peacock, the advertising supported online video service from NBCUniversal claims 33 million signups within nine months and just six months of its nationwide launch, ahead of internal targets.

“People are signing up,” said Jeff Shell, the chief executive of NBCUniversal. “They’re using it more than we expected. And advertisers are very interested in buying it. So this steady growth is very promising for us.”

However, NBCUniversal revenue in 2020 was down 17% to $28.08 billion, hit by reductions in theme parks and filmed entertainment.

For its part, AT&T pointed to over a million fibre broadband net adds with market penetration reaching around 34%. It now has 41.5 million HBO Max or HBO subscribers in the United States, which is two years ahead of its plan.

John Stankey, the chief executive of AT&T, explained the strategy. “Beyond our core connectivity services, we’re focused on our goal to establish relationships with most U.S. households, and HBO Max is the key here. Through our software-based entertainment platforms, we can learn more about our customers and create long-lasting emotional connections with our award-winning storytelling capabilities.”

“if we don’t use that as an opportunity, as a springboard for us to start thinking about how we extend those customer relationships across other opportunities either to own and operate content or engagement with a customer or to use the platform as a means for others to distribute, we’d be losing a huge opportunity.”

“I think about owning some degree of engagement with the customer, a relationship, a means to build with them, having them interact with your service so that you have insights as to who they are, what they like, what they do, what their proclivities are, being able to emotionally attach with them, having a software platform that allows you to build the next building block of a product that extends into engagement, that talks about dynamics of changing consumption in social and interactive, I think this is a really important dynamic for the health of our business.”

At Charter, chief executive Tom Rutledge explained the relatively positive performance in video in terms of gains in broadband. “We grew our video against a macro trend of declining multichannel video growth,” he said. “That macro trend hasn’t gone away and I expect in general, video growth for the industry will continue to decline maybe at a moderate pace.” Looking ahead, he said: “I think we’ll do better than the industry in general if you just look at multichannel video growth, whether that will be positive or negative I’m not sure.”

“So our video strategy is to continue, obviously, to sell the products that we have historically sold and to sell them with a reasonable margin attached to them and to make money with them, but to also include them as part of our overall connectivity relationship with our customer base in a way that allows us to satisfy the needs of as many customers as possible as a result of our network.”

While it is easy to point to a decline in traditional television subscriptions in the United States, the service providers do not seem to be losing out as they transition to more flexible offerings based on their network connectivity.