US PAY-TV Disruption And Consolidation How Streaming Video And Cord Cutting Are Re-Shaping US Pay-TV

The 20,000 Foot View

2015 was a year of unparalleled transition for US pay-TV. AT&T’s acquisition of DirecTV catapulted the communications company to the front of the pack with a combined subscriber base of            million, reaching nearly a quarter of US households. Meanwhile regulators blocked Comcast’s year long bid for Time Warner, enabling rival Charter Communications to move in on the newly vulnerable target. At the same time Altice firmly established itself in the US top ten with its purchase of a majority stake in Suddenlink Communications, followed in September by the acquisition of Cablevision.

Key Findings

• Total Subscribers            the top ten US pay-TV            declined in 2015 from            million            2014 to            million in 2015,            decline of           
           of the US top ten operators experienced subscriber falls in 2015
• AT&T’s new            pay-TV subscriber base was flat                       million compared to 2013 but            obscures a loss of half            million U-verse subscribers in 2015
• Both domestic            and outside acquisitions are consolidating            market
• Including SVOD,            US pay-TV subscriber base grew                       in 2015, up from            million                       million
• The US            subscriber base increased by            million            2015, representing a            increase and            the SVOD share of the            market to           
• SVOD services            growing the US pay-TV subscriber            but their much lower pricing            lead to a longer term            in ARPU
• Multiplay is            ‘unfair’ advantage and will enable            to offset decreases in TV            due to SVOD

Companies mentioned in this report:  Amazon Prime, Altice, AT&T U-verse, Bright House, Comcast, Charter Communications, Cox Communications, DirecTV, Discovery Communications, Dish Network, Disney, ESPN, Hulu, Mediacom, Netflix, New Corp, Sling, Suddenlink, Verizon FIOS