Posts for 'Leichtman Research Group'

The following video was recorded at VideoNuze’s third annual Connected TV Advertising PREVIEW: 2023 virtual on February 28, 2023.

Welcome and How CTV’s Omnipresence is Reshaping the TV and Advertising Industries
CTV is now omnipresent in U.S. households, in turn completely reshaping the TV industry. Viewers are embracing streaming and wide array of streaming choices. In this stage-setting session, one of the industry’s leading researchers lays out all most important data, including newly-released survey results underscoring the extent to which viewers are shifting their behaviors.

Bruce Leichtman – President and Principal Analyst, Leichtman Research Group (presenter)
Will Richmond – Editor and Publisher, VideoNuze (interviewer)

Cord-cutting slowed down in Q3 ’20, with top pay-TV providers in the U.S. losing around 120K subscribers, according to Leichtman Research Group. These pay-TV providers account for about 95% of total pay-TV subscribers in the U.S. In Q3 ’19, on a pro forma basis, this group of providers lost approximately 945K subscribers.

While top traditional pay-TV providers all improved their performance in this year’s third quarter, a key driver of overall industry performance was virtual pay-TV providers, which recorded their best quarter ever. According to LRG, four of the virtuals (Hulu + Live TV, Sling TV, AT&T TV Now and fuboTV) collectively added 1.035 million subscribers in Q3 '20. Hulu + Live TV was by far the biggest contributor, with 700K additions, making it now the fifth largest pay-TV provider with 4.1 million subscribers.

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Connected TV ownership continues to surge, with 80% of U.S. TV households now having at least one CTV, according to new research from Leichtman Research Group. The penetration of CTVs has grown steadily from 24% in 2010 to 57% in 2015 to 74% in 2018.

The mean ownership is 4.1 CTV devices per CTV household, translating into approximately 400 million CTVs currently deployed, according to LRG, up 60% from 250 million in 2016. 64% of CTV households said they had 3 or more CTVs.

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Large pay-TV providers lost a total of nearly 2.1 million video subscribers in Q1, according to data compiled by Leichtman Research Group. The 2.1 million is more than double the approximately 1 million video subscriber loss sustained in Q1 ’19 and a record for the industry.

No doubt Q1 reflected ongoing challenges the industry has faced for years: high pricing relative to SVOD services, subpar linear viewing experiences interrupted by too many ads, a proliferation of connected TV devices enabling myriad competitive OTT services to be viewed on the big screen, etc. But the tail end of Q1 also saw the first impacts of Covid-19: the loss of live sports which has been a pay-TV’s firewall for years and the economic crisis that’s leading to consumer belt-tightening.

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It’s too soon to know whether 2019 will be remembered as the turning point year for the pay-TV industry - when all of the negative trends coalesced into a perfect storm that permanently diminished the industry’s place in American homes. But I’d say the odds are likely that 10-20 years from now, 2019 will likely be the top candidate for “turning point year.”

For evidence, consider new data from Leichtman Research Group, finding that major pay-TV providers which account for 95% of the market, lost 4.9 million subscribers in 2019. If 100% of providers had been counted, the losses would have been 5 million or more.

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Over the past few years a powerful virtuous cycle of wired broadband Internet access, connected TV and over-the-top premium content has taken hold, disrupting the traditional TV and pay-TV industries. This virtuous cycle is going to accelerate going forward, causing further instability for established providers and significant opportunity newer entrants.

Robust broadband is the foundation of the virtuous cycle. Today Leichtman Research Group reported that U.S. homes subscribing to broadband cracked the 100 million level for the first time. Big cable TV operators, who have been offering broadband for 25 years, are the winners, now accounting for 67% market share, vs. 33% for big telcos. That’s up from a 64%-46% split 2 years ago in Q3 ’17. Big cable TV operators continue to gain subscribers (830K in Q3 ’19, up 14% vs year ago) while telcos continued to lose them (down 225K in Q3 ’19, the biggest quarterly loss in over 3 years).

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I’m pleased to present the 479th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

Q2 was a very tough quarter for pay-TV operators, with cord-cutting soaring to a record level. This week we dive into the numbers and discuss why things have changed so dramatically since Q2 ’18. Then we transition to the Viacom-CBS deal, which was formally announced this week. Colin sees substantial upside, leveraging Pluto TV, which Viacom acquired earlier this year.

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Cord-cutting surged to a record in Q2 ’19, with pay-TV providers that account for 93% of the industry losing just over 1.5 million subscribers, according to Leichtman Research Group. The loss is up from 420K in Q2 ’18. As usual, satellite providers were responsible for the majority of the losses, with DirecTV losing 778K subscribers in the quarter and Dish losing 79K. The combined drop was nearly double the 480K lost in Q2 ’18.

The biggest seven cable TV operators lost a combined  455K subscribers in Q2 ’19 compared to a loss of 275K a year ago.

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The biggest U.S. cable companies added nearly 2.9 million broadband subscribers in 2018 according to a new report from Leichtman Research Group. That was up from 2.7 million subscribers added in 2017.

Cable-delivered broadband continues to dominate, with 65% share, compared to telcos’ 35%, the biggest gap since Q3 ’03. The biggest telcos collectively lost over 470K broadband subscribers in 2018, slightly better than the 620K they lost in 2017. The top providers combined now have 98.2 million broadband subscribers.

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Pay-TV operators took a drubbing in Q3 ’18 as the boost the industry has gotten from consumers migrating to virtual MVPDs or “skinny bundles” mostly evaporated. According to Leichtman Research Group, the industry as a whole lost about 975K traditional subscribers (its worst ever). Subtracting estimated gains for skinny bundles the Q3 loss would have topped a million.

Going back just one quarter to Q2 ’18, the industry as a whole (both traditional pay-TV and skinny bundles) may have actually eked out a net subscriber gain, as traditional subscribers “cord-shifted” to skinny bundles. But in Q3 that short trend came to screeching halt, as both DirecTV Now and Sling TV additions slid dramatically. In Q3 ’18 the services combined to add just 75K subscribers, down from 536K a year earlier (and that’s on top of escalating subscriber losses at the core satellite services). It’s not clear how other skinny bundles performed in Q3 as they don’t publicly report their numbers.

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Major SVOD services’ popularity continues to expand, with new research from Leichtman Research Group finding that 69% of U.S. households now subscribe to either Netflix, Amazon Prime and/or Hulu. That’s up from 64% last year and 47% in 2014.

Also noteworthy is the rise of multi SVOD service households. LRG found that among SVOD households, 63% now access more than 1 SVOD service, which is up from 38% in 2015. That means that 43% of U.S. households now access more than one SVOD service, more than double the 20% rate from 2015.

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Traditional pay-TV operators accounting for around 95% of the market lost 305K subscribers in Q1 ’18, compared to 515K in Q1 ’17 according to Leichtman Research Group. The loss is net of 405K Sling TV and DirecTV Now skinny bundle subscribers gained in the quarter by Dish and DirecTV, compared to 265K added in Q1 ’17. Backing out the skinny bundle gains, traditional pay-TV lost 710K subscribers in Q1 ’18 vs. a loss of 710K in Q1 ’17.

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12% of 18-34 year-olds in the U.S. are now subscribing to a skinny bundle such as Sling TV, DirecTV Now, YouTube TV, Hulu with Live TV or PlayStation Vue, according to new research from Leichtman Research Group. This group accounts for 53% of adults who subscribe to a skinny bundle. Just 3% of people 45+ take a skinny bundle.

The data is part of LRG’s first survey on the topic, so there aren’t any trend lines available. Skinny bundles have been around for several years, and multiple analysts have estimated there are somewhere between 4-5 million U.S. homes now subscribing. It’s still very early days for skinny bundles as there’s been very little mass marketing to date.

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The top 13 pay-TV operators in the U.S., which represent around 95% of the total market, lost nearly 1.5 million subscribers in 2017, double 2016’s loss of 760K subscribers, according to Leichtman Research Group. However, the loss would balloon to nearly 3.1 million subscribers after deducting the 1.6 million skinny bundle or “vMVPD” subscribers that were added in 2017. The 3.1 million multichannel subscriber loss is about 62% higher than the 1.9 million lost in 2016. The top 13 pay-TV operators ended 2017 with approximately 92.2 million subscribers.

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I’m pleased to present the 384th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

On today’s podcast, Colin and I first discuss Q2 ’17 pay-TV video subscriber results. Skinny bundles played a big part in offsetting accelerating losses in traditional multichannel services. Will this continue and if so what are the implications?

We then dig into the DVD market’s decline which was further accelerated this week when Amazon decided to close down its LOVEFiLM DVD-by-mail business in several European countries. Colin notes that Netflix’s DVD business has had a huge drop-off also and he speculates whether it too might get cut loose. On the bright side, Redbox re-upped its deal with Lionsgate, showing that DVDs still have a bit of life left.

Finally, Apple was back in the news this week, reportedly allocating $1 billion for original TV shows. We speculate on whether this will be successful and what challenges Apple will face.

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The biggest U.S. pay-TV operators lost approximately 655K video subscribers in Q2 ’17, compared to a loss of 715K subscribers in Q2 ’16, according to Leichtman Research Group.

But the Q2 ’17 loss would rise to around 895K if not for the approximately 235K subscribers added by skinny bundles Sling TV and DirecTV Now, which helped AT&T’s and Dish Network’s results. The 895K is worse than the 760K video subscribers lost in Q2 ’16 after backing out the approximately 45K skinny bundle adds in that quarter. The second quarter is traditionally weak for the industry with college students on the move.

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U.S. adoption of Netflix, Amazon Prime and/or Hulu is up to 64% of homes, an increase from 47% in 2014, according to Leichtman Research Group. Of those who have one of these SVOD services, 51% now have more than one of them, up from 35% in 2014.

On our podcast last week, Colin and I talked about how the number of people taking multiple SVOD services has become a central trend in the industry and is helping spur growth for all providers. Both Amazon’s Jeff Bezos and Netflix’s Reed Hastings have insisted over the years that people will take multiple services, and that appears to now becoming reality.

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I’m pleased to present the 371st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

The persistent media narrative around pay-TV cord-cutting has gained a lot of traction in the past few weeks as it became clear that the industry lost 700,000-800,000 traditional multichannel video subscribers in Q1 ’17, the first time a first quarter loss has ever occurred.

But pay-TV’s losses are attributable to key factors beyond cord-cutting as our guest this week, Bruce Leichtman, president of Leichtman Research Group, and a premier industry analyst, explains. Bruce reveals why the Q1 loss in fact has more to do with specific pay-TV providers (primarily Dish Network) cutting back on new subscriber promotions. This reduction in “top of the funnel” additions ultimately flows into the net subscriber numbers.

While cord-cutting is indeed ticking up, Bruce walks us through his analysis of why the industry’s dynamics are more nuanced than most media reports suggest. We also dig into the role of connected TVs, the prospects for skinny bundles, SVOD’s impact and how Comcast in particular is bucking industry trends using X1. Bruce also discusses the significance of there now being more broadband subscribers than video subscribers in the U.S.

(Apologies in advance, the recording is a bit scratchy as we were in 3 locations and had some WiFi challenges.)

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More data today showing the ascendance of Netflix into Americans’ lives. Leichtman Research Group’s 15th annual On-Demand TV survey found that 23% of U.S. adults now stream Netflix on a daily basis, nearly quadruple the 6% who did back in 2011. 81% of Netflix users say they watch Netflix on a TV set. And 54% of adults said they have Netflix, vs. 53% having a DVR, the first time the penetration lines have crossed (in 2011, 44% had a DVR and 28% had Netflix).

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I'm pleased to present the 348th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

We lead off this week with a cord-cutting update, based on reported Q3’16 results from the 11 largest pay-TV operators in the U.S. Video subscriber losses expanded a bit, to 255K in Q3 ’16 vs. 210K in Q3 ’15, with a continuing shift to cable operators and away from satellite and telco. As I wrote on Wednesday, depending on how the DirecTV Now, Hulu and YouTube skinny bundle launches in 2017, subscriber losses could accelerate.

We then shift to discussing new TiVo survey data that provides insights about online video viewers’ tolerance for ads. As Colin points out, despite respondents stating they have a low tolerance, their behavior suggests otherwise. That suggests there’s more potential for ad-supported premium video, in addition to the SVOD model that has thrived.  

Speaking of ads, I also point out the surprising research from Brightcove this week, that 46% of people who watched a branded video on a social platform then made a purchase. That’s the kind of performance that gets marketers’ attention and could portend an increase of more TV ad dollars moving to social.

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