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Pay TV sub-losses in Q1, Nielsen’s flawed TV consumption rankings

Industry voices from Dan Rayburn

Welcome to the latest episode of Streaming insights and information from Dan Rayburn, a weekly insights column on StreamTV Insider where the industry analyst places facts and figures on the news you need to know about. Join the discussion on LinkedIn and return each week as he breaks down key industry events.

Here’s what Rayburn is tracking for the week of May 15, 2024: First Quarter Pay TV Revenue Subscriber Numbers – vMVPD does not offset traditional straight-line losses; Nielsen’s flawed new TV consumption rankings; Comcast’s StreamSaver Bundle; Plus, Tubi, EchoStar, Vizio, WBD Revenue.

Pay TV subscribers in the first quarter

In the first quarter, Verizon, Comcast, Charter, Altice, EchoStar and WOW! lost 1.55 million pay TV subscribers, while Hulu+ Live TV lost 100,000 subscribers and Sling TV lost 135,000. Combined, that’s almost 1.8 million losses on live TV in the first quarter. Fubo added 226,000 subscribers this quarter and we don’t know how many subscribers YouTube TV has gained or lost. But it’s a safe bet that YouTube didn’t make up the difference of almost 1.55 million.

While Peacock and Paramount+ don’t have a live linear channel lineup comparable to pay TV, they do have live content. Peacock gained 3 million subscribers in the first quarter and Paramount+ added 3.7 million. Consumers don’t tune in live; they just go from a deep linear channel setup to specific live content. Max gained 700,000 subscribers in the US in the first quarter, but we don’t know how many subscribers added the B/R Sports Add-On for live sports.

We all know that sports content drives live TV viewing and drives consumers away from paying TV services more quickly, but so far vMVPDs are not benefiting from a steady stream of new signups. Still, some in the industry continue to suggest that Hulu and other vMVPDs are doing better than them. Someone who covers the streaming space recently said in a LinkedIn post, “…Hulu+ Live TV in particular is steadily adding customers.” That’s just not accurate.

Over the past three years and one quarter, Hulu+ Live TV has risen from a low of 3.7 million subscribers to a high of 4.6 million. Over the past two years, total subscribers have not budged more than 10%, and over the past five quarters, that number has dropped to 6.5%. Six quarters ago, Hulu+ Live TV had 4.5 million subscribers. Disney reported just the same 4.5 million subscribers at the end of the first quarter. These numbers tell the story; everything else is just hype and poorly worded messages with vague references. Usually the person writing the message doesn’t know the numbers.

Looking at the pay TV cable rollback figures from last year and the first quarter of this year, I estimate that the pay TV market will lose about 5 million subscribers combined by 2024. That would be a loss of about 7% of the total number of pay TV households in the US. Chart here.

Nielsen’s new fuzzy rankings of TV consumption

Nielsen has launched “The Media Distributor Gauge,” collected and ranked by media company, comparing total TV consumption across broadcast, cable and streaming. But as usual with Nielsen, it’s vague and unclear and doesn’t make an apples-to-apples comparison.

Some of the brands being compared are parent companies, such as The Walt Disney Company, while others are separate streaming services, such as Prime Video. Nielsen says the new insight is created by mapping all “broadcast and cable networks and streaming services – down to their parent company,” but Prime Video is not a company; it is a service.

Based on the chart, Freevee wouldn’t be included, nor would Twitch, all of which fall under Amazon and not Prime Video. YouTube is listed, but not YouTube TV. Why? NBCUniversal is listed as the parent company, which Comcast owns, but Xumo would not be involved as Comcast, not NBCU, owns it. Or maybe I’m wrong, but the point is there’s no way to know.

And how does Nielsen define ‘TV consumption’? Most YouTube content is not comparable to the same content on Netflix, Paramount, or Disney TV channels and services. Based on content length alone, looking at data from 2022 (the last year I could find it), just over 50% of videos on YouTube were between 30 seconds and 2 minutes. That’s not television. As it is, these Nielsen rankings are useless, flawed, and not comparable from apples to apples.

Comcast’s “StreamSaver” bundle

Comcast’s CEO has announced plans for StreamSaver, an upcoming bundle of Peacock, Apple TV+ and Netflix that will only be available to Comcast’s broadband, TV and mobile subscribers starting this month. He said the bundle will be available at a “heavily reduced price,” but no pricing details were shared.

What Fox didn’t say about Tubi in the first quarter

If you were hoping for revenue numbers, P&L, or trend CPM rates from Tubi, we didn’t get them during FOX’s earnings call.

The company didn’t discuss any metrics beyond the useless MAU numbers, and total watch time increased by 36% without mentioning actual watch hours. The CEO of FOX said that 90% of user time on Tubi comes from VOD content, and not from their FAST channels. The company declined to say whether Tubi is profitable. When asked what Tubi would look like in the next three years, the answer was: “Tubi continues to grow.” However, he also warned that “there will be some headwinds for the entire market in the next quarter.”

Echostar Earnings

EchoStar Q1 2024 earnings: Sling TV lost 135,000 subscribers to end Q1 with 1.92 million subscribers. DISH TV lost 213,000 pay-TV satellite subscribers and ended the first quarter with 6.26 million subscribers.

About Sling TV, DISH said: “We continue to experience increasing competition, including competition from other subscription video-on-demand and live linear OTT service providers, many of which are providers of our content and football and other seasonal sports programming directly to subscribers on an à la carte basis.” Sling TV has been on the market for eight years and has never surpassed 2.6 million subscribers at its peak.

Vizio Earnings

Vizio Q1 2024 earnings: SmartCast Active Accounts growth slows, with only 100,000 accounts added to end Q1 with 18.6 million. Platform+ net revenue was $159.6 million, up 27% year over year. SmartCast’s average revenue per user (ARPU) was $34.24 (last 12 months), up 17% year over year. The number of hours streamed per average SmartCast Active Account increased by 8% year-over-year to 101 hours per month. Users streamed 5.6 billion hours this quarter. Now has over 300 FAST channels.

Warner Bros. Discovery revenue

WBD Q1 2024 Profit: Added 2 million DTC subs (700,000 from US) to end the quarter with 99.6 million. DTC’s revenue was $2.46 billion with a profit (Adjusted EBITDA) of $86 million. Global DTC ARPU was $7.83, up 4% year over year.

More details about the first quarter

  • Regarding the NBA content licensing negotiations, WBD said they are “hopeful to reach an agreement that makes sense for both parties.”
  • Cost of revenues increased 5%, primarily due to the allocation of US sports costs
  • International subscriber growth was “partially offset by lower U.S. subscriber numbers, largely due to continued linear declines in wholesale subscribers”
  • Speaking of the new upcoming bundle with Disney, WBD said, “It will be priced right,” but didn’t release any pricing details.
  • WBD’s TV network revenues fell 8% to $5.13 billion, while advertising revenues fell 11% (year over year)
  • WBD’s studio segment revenue fell 12% to $2.82 billion (year over year)
  • New Lord of the Rings is expected to be released in 2026
  • Corporate debt stands at $43.2 billion, it paid down $1.1 billion in debt in the quarter and also announced a $1.75 billion cash offer aimed at further reducing debt.

Dan Rayburn is an analyst in the streaming media industry, with regular TV appearances on CNBC, Bloomberg TV, and Schwab Network, among others. He serves as conference chair of the NAB Show Streaming Summit in Las Vegas each year, and his website streamingmediablog.com is one of the most read sites for broadcasters, content owners, OTT providers, Wall Street money managers and industry executives. He also has a podcast at danrayburnpodcast.com. He can be reached at (email protected)

Dan Rayburn’s Streaming Analysis & Insights is an opinion column. It does not necessarily represent the views of StreamTV Insider.