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Top cable and traditional pay TV providers in the U.S. widened their subscriber losses in 2022, as more consumers continue to cut the cord.
The largest pay-TV providers lost a total of 5.8 million net video subscribers in 2022, compared to a loss of 4.7 million in 2021, according to the latest tally from Leichtman Research Group. The pain was felt most acutely among the cable providers, who saw a total loss of 3.5 million subscribers in 2022, compared to 2.7 million in 2021. Of those, Comcast saw the biggest drop, losing just over 2 million subscribers, followed by Charter, with a loss of 686,000, and an estimated drop of 340,000 for Cox.
Satellite TV provider DirecTV also saw a big loss, losing an estimated 1.5 million subscribers in 2022, according to the research group.
This comes as traditional media’s move into streaming, which is meant to offset the loss in cable subscribers, is still in a transition phase. Companies such as Comcast and Disney have named 2023 as the year of peak investment in streaming, with the hope of reaching profitability in that segment in the coming years. Still, as Disney CEO Bob Iger noted on the company’s first-quarter earnings call in February, it’s not there yet.
“The streaming business, which I believe is the future and has been growing, is not delivering the kind of profitability or bottom-line results that the linear business delivered for us over all over a few decades,” Iger said. “And so we’re in a very interesting transition period, but one I think, is inevitably heading towards streaming.”
First-quarter revenues at Disney illustrated the uneven balance. Revenues at Disney’s linear networks were $7.3 billion, down 5 percent from a year ago, while direct to consumer revenues were $5.3 billion, up 13 percent from a year ago. Linear operating income was $1.3 billion, down 16 percent from a year earlier, while direct to consumer reported losses of $1.1 billion, down 78 percent from a year earlier.
Comcast too is relying on its streaming services to offset its linear losses. The company is seeing momentum in streaming, with Peacock reporting more than 20 million subscribers in the latest quarter, in its strongest quarterly gain since the service’s launch in 2020. But it came with a widening loss of $2.5 billion for the segment in 2022, and the expectation that losses will grow to $3 billion in 2023.
“It’s a costly pivot, and we’re right in the middle right now,” Comcast CFO Jason Armstrong told investors at a Feb. 27 conference.
On top of that, the linear business has also faced added pressure in recent quarters from the advertising downturn. For example, at Warner Bros. Discovery, where the company is still posting streaming losses, but to a lesser degree than last quarter, linear channels saw a 17 percent year-over-year decline in advertising revenue.
There are also signs that even the stalwarts of linear channels, sports and news programming, are facing pressure. In its second quarter, Fox Corp. saw its cable affiliate revenue (the carriage fees pay TV operators pay for access to channels) decline for the first time year-over-year. This came as its cable channels were charging more, but not enough to make up for the decline in subscribers.
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