It’s the Least Wonderful Time of Year for Pay TV Providers

U.S. pay TV providers have learned to view the second quarter of their financial year with dread. Last year, the industry suffered the worst-ever video subscriber loss in history. While not all of the numbers are in for the second quarter of 2016, the numbers from some of the industry’s biggest players are shaping up to be as bad—if not worse—than 2015.

DISH Network shed 281,000 subscribers in the second quarter of this year, compared to 81,000 during the same quarter last year—a number that includes subscribers to its Sling TV over-the-top streaming service. While DISH didn’t break out numbers for Sling TV and its DTH service separately, it’s reasonable to assume that the company’s losses were concentrated primarily (if not exclusively) in DISH’s satellite business and not its new streaming offering. The firm now stands at 13.593 million subscribers.

AT&T dropped 49,000 video subscribers, though there was a clear dichotomy in the company’s video portfolio. DirecTV, which AT&T acquired in 2015, had a monster quarter, adding 342,000 subscribers. U-Verse, on the other hand, lost 391,000 video subscribers. AT&T is clearly de-emphasizing U-Verse in favor of DirecTV, but hasn’t yet scaled up enough satellite growth to offset its IPTV losses.

Verizon’s FIOS IPTV service also saw its share of losses, with 41,000 subscribers dumping their service—a sharp break from a long stretch of subscriber growth.

Finally, Comcast, the country’s biggest cable provider, lost 4,000 subscribers, but spun the losses as “the best result for a second quarter in 10 years.” In Q2 2015, Comcast shed 69,000 video subscribers and hemorrhaged 144,000 in the second quarter of 2014.

Other heavyweights, such as Time Warner Cable, Cablevision and SuddenLink, haven’t yet reported their numbers.

While the second quarter numbers are bleak, there is room for guarded optimism for an uptick in growth for the third and fourth quarters for at least a few of the heavy-hitters.

First, the second quarter has historically been difficult for pay TV providers—spring/summer is a time when many households move, resulting in a service change. On the satellite side, DISH has been hampered this quarter by a retransmission battle with Tribune Media that has kept numerous channels in 33 markets blacked out, undoubtedly prompting customers to jump ship. Verizon, too, was dealing with a worker’s strike and backlog of installations, which almost certainly artificially depressed their numbers for the quarter. Indeed, Verizon has had seven straight quarters of subscriber growth, which suggests the company should right the ship starting at Q3.