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Pay TV Lost 1.8M Subscribers in 2016 as Cord-Cutting Accelerates
The rate of decline for cable has slowed in the U.S., while telcos bled the most in anticipation of AT&T U-verse's planned phase out.

Cable, satellite, and telco multichannel providers combined lost 1.8 million U.S. subscribers in 2016, notes Kagan, formerly SNL Kagan and now part of S&P Global Market Intelligence. According to Kagan's U.S. multichannel subscriber report for Q4 2016, cord-cutting accelerated in that period with a decline of 460,000 subscribers. That left cable, satellite, and telcos with 94.7 million subscribers at the end of the year.

Looking at cable alone, the report says its decline is slowing. Cable lost 472,000 subscribers in 2016, which is 28.5 percent less than its 2015 decline. It was also the best loss cable has had since 2007. It says something about the pace of cord-cutting that a loss of nearly half a million subscribers is a positive.

Cable lost 103,000 subscribers in Q4 2016, while satellite lost 18,000 in that period. Telcos did especially poorly, with a Q4 loss of 338,000 subscribers. That's driven by the planned retirement of AT&T U-verse, Kagan notes.

Overall, 77.5 percent of U.S. household have a pay TV subscription, down from 81.3 percent in Q1 2015.

"We believe that a convergence of factors will continue to weigh heavily on the traditional multichannel universe," says Tony Lenoir, a senior research analyst for media and communications with Kagan. "This includes the continued rise in programming expenses (and the cost of content's inflationary effect on the average monthly subscription), the decline in multichannel affordability (see first point), the proliferation of more affordable internet-based alternatives, evolving video-consumption habits (due to the proliferation of OTT alternatives), and demographic trends (the digital millennial—and younger—generations substituting baby boomers, historically heavy multichannel consumers)."

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