Pay TV penetration fell to just 61% of U.S. households in the third quarter, its lowest level since 1993, which was just before the dawn of satellite TV competition for cable, according to celebrity equity analyst Craig Moffett's latest quarterly cord-cutting report.
Cord-cutting collectively reached a year-over-year rate of 6.2% in Q3, an all-time high, narrowly increasing over Q2 (6.1%) and up pretty significantly over Q3 2021 (5.2%).
Collective customer losses for U.S. pay TV operators totaled 655,000 in Q3 vs. just 617,000 a year ago.
Video attrition was particularly bad for the cable industry, which lost 1.04 million TV customers in Q3 vs 787,000 a year ago.
All told, traditional linear pay TV platforms shed 1.95 million customers in the third quarter, losses that were partially offset by the rekindled growth of virtual pay TV services. The vMVPDs added 1.29 million customers in Q3 vs. just 42,000 adds a year ago.
The overall grim linear pay TV performance caused Moffett to ponder some specific recommendations. For one, cable companies Comcast and Charter, he said, might be better off focusing on their to-date successful infiltration into the U.S. wireless business rather than pivoting their video efforts into the out-of-footprint-focused Xumo TV JV.
And the major media conglomerates mostly face a dire outlook, he said, save for Disney, which has the needed distribution scale for a direct-to-consumer pivot but will need newly returned CEO Bob Iger to engineer a monetization miracle to make the industry's only hope for a truly successful linear-to-DTC transition work.
"There remains no obvious floor for traditional video distribution; whatever sports and news floor there might be for cable network programming -- and we're no longer confident even of that," Moffett said.
