U.S. vMVPDs added 868k subscribers in 2Q 2018 but overall pay TV subs fell

Strategy Analytics: U.S. vMVPDS Add 868K Subscribers in 2Q 2018 but Overall Pay TV Subscribers Fall

BOSTON — Strategy Analytics’ analysis of pay TV subscriber numbers shows vMVPDs with 868K net adds in 2Q 2018 bringing the total number of vMVPD subscribers to 6.73M, up 119% YoY. Despite this, overall pay TV subscribers (cable, satellite, IPTV, vMVPD) fell to 93.78M, breaking a string of two consecutive quarters of growth, according to Strategy Analytics’ Television & Media Strategies (TMS) report, ”U.S. Pay TV and Video Subscriber Update – 2Q 2018,” which examines the subscriber bases of 27 public traded and private pay TV operators, accounting for 97% of all pay TV subscriptions.

“While the entire vMVPD segment is growing, AT&T’s DIRECTV NOW deserves special notice,” said Michael Goodman, Director, Television & Media Strategies, given how rapidly it has grown in a fairly short period of time. If it continues on its current growth trajectory it will overtake Sling TV as the largest vMVPD in early 2019.”

In comparison, 2Q 2018 was not particularly kind to legacy pay TV providers (e.g., cable, satellite, IPTV) as they lost nearly as many subscribers (-973K) as the prior two quarters combined (-1.16M). In 2Q 2018, total legacy pay TV subscriptions fell to 87.05M, down 3.6% YoY.

“Historically, pay TV in the U.S. has consisted of cable, satellite, and IPTV; however, the introduction of over-the-top pay TV services, commonly referred to as vMVPDs, necessitates a change in our thinking,” said Goodman. “What we have commonly referred to as pay TV (cable, satellite, and IPTV) should now be referred to as Legacy Pay TV, while the definition of Pay TV should include vMVPDs.”

(in Millions)              2Q 2017  3Q 2017  4Q 2017  1Q 2018  2Q 2018  % Change YoY
-------------------------  -------  -------  -------  -------  -------  ------------
Pay TV Subscribers          93.332   93.051   93.564   93.894   93.789          0.5%         

Legacy Pay TV Subscribers   90.259   89.187   88.712   88.024   87.051         -3.6%
  Cable Subscribers         47.421   47.092   47.025   46.778   46.347         -2.3%
  Satellite Subscribers     32.326   31.771   31.488   31.115   30.637         -5.2%
  IPTV Subscribers          10.511   10.323   10.198   10.130   10.066         -4.2%

vMVPDs Subscribers           3.073    3.864    4.852    5.870    6.738        119.3%
  Sling TV                   1.862    2.037    2.212    2.303    2.344         25.9%
  DIRECTV NOW                 .491     .787    1.155    1.467    1.809        268.4%
  Hulu Live TV                .165     .330     .495     .745     .955        478.8%
  PlayStation Vue             .467     .535     .602     .670     .745         59.4%
  YouTube TV                  .087     .175     .262     .350     .410        368.6%
  fuboTV                         -        -     .125     .235     .325           n/a
  Philo                          -        -        -     .100     .150           n/a

Source: Company Reports, Strategy Analytics Estimates, 2Q 2018
Subtotals may not add up to the total due to rounding
Numbers in Italics are based upon Strategy Analytics estimates