MONTEREY, CA: Pay TV operators in the US lost 625,000 video subscribers in Q2 2015, the largest quarterly drop on record, according to new industry data.
Although there are still 100.4m US residential and commercial customers of pay-TV services, research firm SNL Kagan warned that the trend is likely to continue throughout the year.
"The slide, which follows an uncharacteristically weak first quarter, points towards the likelihood of a much larger decline for full-year 2015 than the industry produced between 2010 and 2014, during what could essentially be seen as a period of general malaise," the report said.
It found there had been "a dramatic softening" in the telco video sector and that cable TV's losses of 350,000, while slowing, remain the greatest source of downward pressure on multichannel subscriptions.
Meanwhile, the direct-broadcast satellite (DBS) segment lost an estimated 304,000 subscribers after DirecTV and Dish Network both reported record declines.
The findings chime with recent analysis by MoffettNathanson Research, which estimated that cable, satellite and telco pay-TV providers lost about 566,000 subscribers in the second quarter, USA Today reported.
It found that the number of US consumers cord-cutting or never subscribing to pay-TV had risen to nearly 2m over the past year. "New households are being formed precisely by the millennials that are least likely to subscribe to pay TV," MoffatNathanson said.
Ian Olgeirson, an analyst at SNL Kagan, attributed the large quarterly falls experienced by the traditional TV providers to the ever-growing number of options available to consumers, especially concerning streaming services. He also confirmed that the firm expects bigger losses over the year.
"You certainly have an emerging slate of options for consumers outside of the multichannel space … and there's the continued gravitational pull of Netflix and Hulu," he said.
"In past years, [the two quarters] tended to balance each other. We didn't see that this year," he added. "Certainly that portends to a bigger loss for the full year."
Data sourced from SNL Kagan, USA Today; additional content by Warc staff