U.S. Networks: Subscriber Decline Is Modest But Steady

The latest Nielsen Universe data reveals accelerating but still modest declines in the subscriber base of most U.S. channels that commission or acquire factual programs.

Cord-cutters and cord-nevers are a tiny fraction of the cord-keepers.

Multichannel Economy:

  • Channels will continue to spend on programming because they enjoy long-term agreements with cable and satellite operators.
  • For the operators, Video bolsters the value of their highly profitable Internet and Telephone products.
  • But for ad-supported channels, a smaller audience is available to view programs, and therefore to attract advertisers.

Network Expectations

  • These relatively small, steady declines in distribution do set expectations in the channels’ executive suites.
  • Mindsets range from the ‘cautious and frugal’ to apocalyptic.
  • Programming and production strategies, budgets, headcount, marketing campaigns, and more are all put under a microscope.

Big Swings

  • Only Nat Geo Channel is making lots of big, quality swings for the fences.
  • Its decisions are at least partly driven by Rupert Murdoch and his family, and their need to offset the serial scandals that have engulfed their Fox News and UK newspaper properties.

Chart

To help you understand the changing scale of the U.S. Cab / Sat economy, here is the year-to-year comparison of the distribution footprints of a selection of channels that schedule unscripted programs.

A Sample of U.S. Cable / Satellite Networks
Subscribers, 
May 2016 vs May 2017
(‘000)

   
NETWORK May ’16 May ’17 +/- %
SUNDANCE 59,346 65,323 5,977 10.1%
INSP 77,344 80,682 3,338 4.3%
VELOCITY 68,290 71,395 3,105 4.5%
BBC-AMERICA 76,331 78,962 2,631 3.4%
BABY FIRST TV 51,967 53,959 1,992 3.8%
NAT GEO CH 87,047 88,939 1,892 2.2%
IFC 69,767 70,719 952 1.4%
OVATION 46,357 46,724 367 0.8%
WE TV 85,412 85,500 88 0.1%
SMITHSONIAN 36,324 36,325 1 0.0%
DISCOVERY LIFE 47,106 46,331 -775 -1.6%
OUTDOOR 38,341 37,399 -942 -2.5%
ID 85,281 84,224 -1,057 -1.2%
CNN 92,639 91,486 -1,153 -1.2%
FOOD 93,959 92,711 -1,248 -1.3%
HGTV 92,112 90,860 -1,252 -1.4%
HBO PRIME 35,035 33,762 -1,273 -3.6%
BRAVO 88,268 86,962 -1,306 -1.5%
UP 68,925 67,607 -1,318 -1.9%
CNN / HLN 93,861 92,509 -1,352 -1.4%
COOKING 64,281 62,834 -1,447 -2.3%
TNT 91,754 90,284 -1,470 -1.6%
AMC 91,995 90,368 -1,627 -1.8%
USA 93,015 91,319 -1,696 -1.8%
BET 84,995 83,239 -1,756 -2.1%
CENTRIC 51,070 49,307 -1,763 -3.5%
SYFY 91,133 89,329 -1,804 -2.0%
TRU TV 88,481 86,656 -1,825 -2.1%
MSNBC 90,769 88,874 -1,895 -2.1%
E! 91,111 89,156 -1,955 -2.1%
REELZ 65,950 63,981 -1,969 -3.0%
SHOWTIME 30,172 28,147 -2,025 -6.7%
VH1 88,930 86,899 -2,031 -2.3%
TLC 91,430 89,340 -2,090 -2.3%
DISCOVERY 93,010 90,893 -2,117 -2.3%
ANIMAL PLANET 90,222 88,100 -2,122 -2.4%
LOGO 49,597 47,471 -2,126 -4.3%
NAT GEO WILD 57,440 55,309 -2,131 -3.7%
HISTORY 92,725 90,564 -2,161 -2.3%
A&E NETWORK 92,247 89,994 -2,253 -2.4%
CNBC 89,762 87,442 -2,320 -2.6%
FOX NEWS 91,302 88,820 -2,482 -2.7%
OXYGEN 77,141 74,646 -2,495 -3.2%
LIFETIME 92,436 89,923 -2,513 -2.7%
OWN (Oprah) 79,243 76,712 -2,531 -3.2%
MTV 89,342 86,691 -2,651 -3.0%
ESPN 89,797 86,946 -2,851 -3.2%
DIY 60,269 57,259 -3,010 -5.0%
TRAVEL 87,094 83,481 -3,613 -4.1%
AMER. HEROES 56,741 53,114 -3,627 -6.4%
WEATHER 86,602 82,919 -3,683 -4.3%
SCIENCE 71,168 67,321 -3,847 -5.4%
DESTINATION 55,456 51,448 -4,008 -7.2%
FUSE 66,707 62,690 -4,017 -6.0%
SPIKE 88,362 82,520 -5,842 -6.6%
CMT 82,167 74,090 -8,077 -9.8%
VICE NA 70,876 NA NA
TOTAL CABLE PLUS 98,423 96,375 -2,048 -2.1%
TOTAL U.S. 116,400 118,400 2,000 1.7%

Source: Nielsen Universe Estimates
(Note: The data addresses the “receivability” of channels and not the viewing of programs.)

Revenue Impact

  • License fees per subscriber top out at an estimated $7.20 / month for industry leader ESPN.
    • ESPN therefore suffered a revenue loss of around $250 Mn year-to-year.
    • That shook up parent Disney and Wall Street, and precipitated a big round of layoffs.
  • Sub fees for other channels are typically less than 50 cents / month, for example for Discovery.
  • They are as low as a few cents / month for latecomers like OWN or “utilities” like Weather.
  • But whatever the scale, a channel’s steady revenue losses frame expectations and shape programming decisions.

Key Takeaway

  • The Golden Age of U.S. Cable / Satellite may be over.
  • But the giant industry is far from falling off a cliff.
  • Thousands of hours of factual programs will be commissioned or acquired by the channels in the near future.

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