Last week, we focused on how cable providers are finding alternatives to avoid the dreaded cord-cutting from subscribers. This week we’re taking a deeper dive into Q3 results and how Comcast, Charter, and AT&T are not surrendering to consumers trying to cut them off.
The pay-TV results in the most recent quarter were dismal. Comcast, the largest cable company lost 125,000 video customers, AT&T, the parent of satellite TV provider DirecTV lost a record 385,000 traditional video subscribers while Charter shed 104,000 clients- more than double since last year.
DirecTV’s rival Dish Network operates under a different fiscal calendar but their results show they had a loss of about 106,000 in pay-TV subscribers but that’s an improvement from the 281,000 drop in the same period in 2016. Dish’s figures may not be comparable since they have the company’s Sling TV skinny bundle.
Many of these cord-cutters aren’t severing ties with the pay-TV industry completely since the companies are also huge providers of broadband internet service. Charter added 249,000 internet subscribers, AT&T posted a net gain of 125,000 broadband clients, and Comcast gained 249,000 new broadband customers in the latest quarter.
Comcast’s CEO Brian Roberts made a comment last week saying Our broadband business is increasingly the epicenter of our relationship with customers and ultimately where we derive the majority of our profitability.
It appears that people feel the pay-TV industry gouges them by making them pay for channels that they may never use, but cord-cutting doesn’t necessarily save them money. Let’s consider average broadband costs are about $104/month and a skinny bundle like Sling TV ranges from $20-$40/month depending on the channel lineup. Now, if you add Netflix ($10.99/month), Amazon Prime Video ($8.99/month), and Hulu ($7.99 or $12.99 if you choose the no commercial option), you wind up paying an average of $104/month still and get fewer choices.
The pay-TV industry continues to think of ways to hold onto cord-cutters, for example Comcast is currently testing Xfinity Instant TV, a ‘skinny’ bundle of broadband channels starting at $18/month and Charter is reportedly testing a bundle called Spectrum TV for $18/month; these packages would be similar to their competitor’s products of DirecTV Now and Sling TV.
I think pay-TV providers are keeping up with the demand of their customers and accommodating where they can in hopes of retention not retaliation.