The growth rate for virtual multichannel subscribers slowed in the first quarter of 2019, according to a new report from Kagan, a media research group within S&P Global Market Intelligence. Virtual multichannel subscriber growth was 5.8% in the first quarter of 2019, almost half of what it was (11.8%) a year ago.

The Kagan report estimates that the number of virtual multichannel subscribers reached 7.9 million at the end of the first quarter of the year, accounting for 8.2% of total virtual and traditional subs.

According to this latest Kagan report, virtual multichannel trailblazers Sling TV and DIRECTV Now, which account for half of the segment, are both showing “signs of slowed momentum.”

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Virtual multichannel offerings include Sling TV, DIRECTV NOW, fuboTV, and other offerings that are similar to traditional cable channel lineups but are delivered over a mobile or fixed broadband connection. Pay-TV operators including AT&T and DISH have turned to these virtual offerings to help soften the blow of traditional pay-TV cord cutting. But this slowing momentum highlights analysis revealed earlier this month by MoffettNathanson that shows vMVPD services aren’t capturing as many traditional pay-TV cord cutters as may have been hoped.

According to Kagan numbers, the pay-TV industry lost over a million subscribers for the third quarter in a row, losing 1.4 million in 1Q19.  The firm reported a loss of 1.1 million 4Q18, and 1.2 million in 3Q 18.

Additional report findings:

  • Combined cable, direct broadcast satellite (DBS) and telecommunications (telco) subscriptions showed the largest single quarter decline to date, falling 1.4 million, with satellite accounting for the bulk of the fall.
  • Combined quarterly net losses for DIRECTV and DISH Network continued to creep toward 1 million.
  • Some 68% of occupied U.S. households subscribed to traditional multichannel in the first quarter. Combining virtual and traditional subscriptions pushes the metric up to 75%.

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