Cable and Satellite TV Are Dying: AT&T Suffers Largest Pay TV Subscriber Drop in History

Streaming services may have answered consumer needs.

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Cable and satellite TV bigwigs have cause for concern, as research shows dwindling numbers of people picking up subscriptions to watch their shows with companies like AT&T and Cablevision. It’s looking more and more like streaming services may indeed be the future of television.

New research from Leichtman Research Group released Tuesday shows that the U.S.’s thirteen largest pay TV providers added just over 10,000 subscribers in the first quarter of 2016. That sounds like a good thing, but during the same quarter in 2015 those companies added around 170,000 subscribers, equating to a drop of over 90 percent year-over-year.

It was particularly bad for AT&T. Its U-Verse service lost 380,000 subscribers, bringing its total down to 5.26 million. That, Leichtman reports, is the largest drop by any provider ever in any single quarter.

“Overall, the traditionally strong first quarter for the pay-TV industry was tepid this year. Despite slight gains in the quarter, net adds in 1Q 2016 were down by about 160,000 from a year ago,” says Bruce Leichtman, founder and CEO of Leichtman Research.

Randall Stephenson, CEO of AT&T.

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Despite the prevalence of streaming services like Netflix and Hulu, outlets are still trying to make broadcast-style pay TV happen. New cable channel Viceland, which plays video content from media company Vice around the clock, launched in February and has already caused significant losses for part-owner Disney.

The Viceland TV channel is also available on Sling TV, Dish Network’s app-based, streaming television service. Dish Network reported this February that Sling TV had over 600,000 subscribers, up from 169,000 in March 2015.

The FCC’s moves to make cable television work more like Netflix has been criticized by the cable and satellite TV companies affected.

Roku CEO Anthony Wood has also come out against measures to stop cable and satellite companies from locking subscribers into using brand-specific cable boxes (often on a leasing plan) to access their services, claiming it would increase costs and cause unnecessary burdens for the consumer to go out and buy their own hardware. That’s particularly surprising as his company is pushing a radical new vision of television where the focus is on internet-based streaming services rather than traditional cable boxes.

In Wood’s vision, the television is “smart” from the start. There’s no extra boxes to worry about, and all streaming subscriptions and payments are managed through a “Roku OS” interface.

Evidence to back up Wood’s claim is the fact that smart TVs have grown while the general TV market has stayed flat. That suggests people are buying into Wood’s vision in droves, and that spells bad news for those pay TV providers tied to a traditional model of selling users a box with a monthly price tag. Television is undergoing a revolution.

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