With the U.S. pay TV business collectively shedding another 1.62 million customers in the second quarter, a trend seems to have emerged.
The industry's biggest remaining growth engine, YouTube TV, has become a seasonal business, expanding when the NFL season is in full swing, and retreating amid other parts of the calendar year.
The latest MoffettNathanson quarterly Cord-Cutting Monitor report illustrates this seasonality, estimating that Google's virtual MVPD only added 50,000 subscribers in the second quarter, after for the first time ever losing customers in a quarter — an estimated 150,000 of them — back in January through March.
This all comes after YouTube TV — freshly infused at the time with new rights to NFL Sunday Ticket — added an estimated 1 million customers in the fourth quarter of last year. (Note these figures are all MoffettNathanson estimates; Google/Alphabet rarely breaks out YouTube TV data in quarterly earnings reports.)
With Hulu Plus Live TV and Fubo also reporting customer declines in Q2, analyst Craig Moffett noted the seasonality of the vMPVD business.
“The first quarter sees the largest number of disconnects — reflecting the end of the NFL season — and those customers generally don’t return until Q3, when the season resumes,” Moffett wrote. “That leaves the second quarter stranded in the middle, with little or no bounce back from the Q1 losses. (Recall also that the Olympics were a third-quarter event as well.) All of which is a long-winded way of saying that we’ll have to wait until Q3 to gauge the growth of the vMVPD segment.“
For rivals of DirecTV, it could be robust. DirecTV stream added around 86,000 customers in the second quarter, Moffett estimates, with DirecTV phasing out satellite and marketing its all-IP platform heavily.
However, with ABC and ESPN currently blacked out on DirecTV because of a fee dispute with Disney, DirecTV customers are undoubtedly seeking refuge in platforms including YouTube TV to find their NFL and college football access.
For its part, Dish’s vMVPD, Sling TV, is being understandably opportunistic on the marketing end. We received this email come-on on Tuesday:
