US Pay-TV Sheds 1.62M in Q2 as Disney-DirecTV Blackout Lingers

Q2 Pay-TV Subscriber Losses Reach Record High, Exceed Previous Quarterly Record

The number of US pay-TV subscribers fell by 1.62 million in the second quarter (Q2) of 2023, marking a record high for quarterly losses in the industry, according to Leichtman Research Group (LRG).

The latest data shows that the ongoing blackout between Disney and DirecTV, which began on July 1, has further exacerbated the decline in pay-TV subscriptions. DirecTV lost 340,000 subscribers in Q2, while Dish Network, which also carries Disney channels, lost 168,000 subscribers.

Streaming Services Continue to Gain Ground, Contributing to Pay-TV Decline

The decline in pay-TV subscriptions has been attributed, in part, to the rise of streaming services such as Netflix, Disney+, and Amazon Prime Video. Streaming service subscriptions reached a record 57% of US households in Q2, up from 52% in the same period last year, according to LRG.

Streaming services offer a more flexible and cost-effective alternative to traditional pay-TV, giving consumers greater control over their content viewing and reducing the need for long-term contracts.

Pay-TV Providers Face Challenges in Retaining Subscribers

Pay-TV providers are facing significant challenges in retaining subscribers as streaming services continue to gain popularity. To combat this trend, providers are offering new services and packages, such as skinny bundles and streaming apps, to appeal to a wider range of consumers.

However, these efforts have had limited success in stemming the decline in subscriptions. Providers are also facing increased competition from telecom companies, such as Verizon and AT&T, which offer their own streaming services and bundled packages that include pay-TV content.

Future Outlook for Pay-TV Industry Remains Uncertain

The future outlook for the pay-TV industry remains uncertain as streaming services continue to grow in popularity. Pay-TV providers will need to continue to innovate and adapt to the changing market dynamics to remain competitive.

One potential growth area for pay-TV providers is live sports. Live sports programming is still a major draw for many consumers, and pay-TV providers have exclusive rights to many popular sporting events. Providers are also exploring new revenue streams, such as advertising-supported streaming services, to offset the decline in subscription revenue.