Rapid declines for multichannel subscriptions persist in second quarter

Rhea-AI Summary

The S&P Global Market Intelligence report highlights a significant decline in U.S. multichannel subscriptions, with a loss of 2.2 million customers in Q2 2020, totaling over 4.2 million in the first half of the year. Traditional services saw an 8.9% annual decline, while virtual services added over 850,000 subscriptions. As of the end of Q2, 87.1 million customers had multichannel subscriptions, indicating a drop in penetration below 60% for traditional services and 67.3% for combined services. The satellite segment led declines, notably at DIRECTV and AT&T.

Positive

• Virtual services experienced a quarterly growth with more than 850,000 net adds.

Negative

• 2.2 million traditional multichannel customers lost in Q2 2020, contributing to over 4.2 million subscriptions lost in H1 2020.
• 8.9% annual decline in traditional multichannel subscriptions in Q2.
• Traditional multichannel penetration fell below 60% in occupied households.

NEW YORK, Aug. 14, 2020 /PRNewswire/ -- The pace of cord cutting in the U.S. did not significantly accelerate with the full impact of COVID-19 in the second quarter, according to Kagan, the media research group within S&P Global Market Intelligence. However, a loss of 2.2 million traditional multichannel customers in the quarter contributed to a decline of more than 4.2 million subscriptions in the first half of 2020.

U.S. operators, facing the absence of live sporting events and the economic fallout of the pandemic, did not see an uptick in interest amid intensifying streaming competition.  In its quarterly U.S. Multichannel Subscriber Report released today, Kagan estimates subscriptions to traditional cable, direct broadcast satellite (DBS) and telecommunications (telco) video services notched an annual decline of 8.9% in the second quarter. 

The virtual services, which rely on unmanaged broadband delivery, returned to a pattern of quarterly growth with estimated net adds of more than 850,000. Combined, the traditional and virtual categories, contracted by 1.3 million in the second quarter.

Additional takeaways from Kagan's Q2 U.S. Multichannel Subscriber report: 

• Total residential customers with a traditional or virtual multichannel subscription dipped to 87.1 million at the end of the second quarter.
• The penetration of traditional multichannel services fell to less than 60% of occupied households while the combined penetration of traditional and virtual packages slipped to 67.3%.
• The satellite segment led the way for cord cutting in the second quarter. The platform, fuelled by declines at DIRECTV and parent AT&T's transition to its broadband delivered AT&T TV, fell by an estimated 1.1 million subscriptions.

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Media Contact
Amanda Oey
S&P Global | Market Intelligence
Tel: 212-438-1904
amanda.oey@spglobal.com

 

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SOURCE S&P Global Market Intelligence

FAQ

What did the S&P Global Market Intelligence report reveal about multichannel subscriptions on August 14, 2020?

The report indicated a loss of 2.2 million traditional multichannel customers in Q2 2020 and an overall decline of more than 4.2 million in the first half of the year.

How did virtual services perform in the second quarter of 2020 according to the press release?

Virtual services added over 850,000 subscriptions, marking a return to quarterly growth despite the overall decline in traditional services.

What was the total number of multichannel subscriptions in the U.S. by the end of Q2 2020?

By the end of Q2 2020, the total number of customers with traditional or virtual multichannel subscriptions was 87.1 million.

What is the current penetration rate of traditional multichannel services?

The penetration of traditional multichannel services fell to less than 60% of occupied households as of Q2 2020.