- Pay TV just suffered its worst quarter in history — a stunning 6.9% drop.
- The TV industry used to hope that digital services like YouTube TV could make up for losses from regular TV.
- But that's not happening. In fact, YouTube TV just had its first quarterly subscriber loss ever.
If you pay any attention to the TV business, you know that pay TV subscriptions have been falling for years. People who used to pay for TV are cutting the cord, and younger people aren't bothering to sign up for pay TV at all.
The trend is only accelerating: The first three months of 2024 were the worst the pay-TV business has ever seen, according to analysts at MoffettNathanson. They estimate that the industry lost a record 2.37 million subscribers — a drop of 6.9%.
A few years ago, optimists in the industry thought that growing digital pay TV services, like YouTube TV, would help make up for the decline of conventional pay TV providers like Comcast.
But that hasn't panned out. And worse than that — those digital TV subscription services are also starting to wobble.
Hulu Live TV, Fubo, and Sling also lost subscribers in the first quarter, MoffettNathanson estimates.
Most startling is that even YouTube TV, which has been growing steadily over the past few years, shrank last quarter — the first time that's ever happened. MoffettNathanson estimates that Google's pay TV service lost 150,000 subscribers in Q1.
For context: YouTube reported that it had more than 8 million subscribers back in February. I've asked YouTube for comment.
The most obvious rationale for the loss: People who were using YouTube TV to watch the NFL — the most powerful draw on TV — canceled the service once the season ended. If that's true, then the glass-half-full perspective is that those subscribers will return this fall when the season starts up again.
But the glass-more-than-half-empty take is that the churn problem that bedevils most pure-play streaming services like Disney+ and Max is also a problem for the digital pay TV services that give you a bundle of channels.
Of course, the fact that all of these digital TV services are easy to add and drop is a good thing for you, the person who pays for TV. And it has been a selling point for those services.
But it's also one reason why the TV industry is increasingly trying to get consumers to sign up for long-term contracts — just like the old-timey cable TV days.