09/11/2015   Guy Bisson
Less bad is good: AT&T ‘disappears’ 700,000 customers, masking slight improvement in US cord-cutting carnage

The US pay TV market took another hit in the third quarter of 2015 officially losing 393,000 customers, while a re-report by AT&T took even more customers out of the market. This is an improvement over the previous quarter (decline of 608,000 homes) and while three companies saw positive net additions, there are underlying causes for concern. 

First the good news: the larger US cable companies seem to be stemming the flow of customers they’ve witnesses in the past couple of years and entering a period of some stability. Both TWC and Comcast saw lower declines in net additions than the past few quarters, and Charter managed a small growth this quarter after a similar period of decline. 

IPTV operators, which had offered the only bright spot in the US pay TV market, seem to be heading for a fall.  The rate of growth for Verizon’s FiOS has slowed noticeably, while AT&T’s U-verse suffered its first ever pay TV decline in the quarter.

While cable overall is still bearing the brunt of cord-cutting, satellite now seems to be a consistent decliner. This quarter saw a re-report following AT&T’s acquisition of DirecTV. The company dropped 709,000 satellite customers in Q3 following a change to the way it counts commercial premises. By re-calculating the previous quarter on the same basis, DirecTV grew by 26,000.

In net terms, Q3 2015 saw a smaller drop in pay TV than Q2 2015 and the same quarter a year earlier. But while the larger cable companies' stabilisation gives some cause for celebration, the smaller cable operators continue to suffer huge customer losses.  IPTV looks set to enter a period of sustained decline and satellite has now joined cable as a regular at the top of the cord-cutting league table.

So, while the official number of a decline of 393,000 is an improvement over recent quarters it masks an inescapable fact: re-report or not, 1.128m pay TV customers that had ‘existed’ in Q2 2015 have disappeared from the market. 

US operators and media have jumped on this ‘less bad’ quarter as a glimmer of light at the end of cord-cutting tunnel, but while there are some indications of a stabilisation among key players, the overall outlook remains bleak.

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