People just aren’t watching — or paying for — TV the way they used to.
The number of people in the US paying cable and satellite giants like Comcast, Time Warner Cable, and DirecTV for TV service fell during the first three months of the year, according to a new report from MoffettNathanson, a media and telecommunications research firm.
It’s the first time that the industry has lost subscribers during that time, which is traditionally a strong period for pay TV, according to the research note. Last year, pay TV companies added 271,000 subscribers in the first quarter, and in the same period in 2013, they added 208,000 subscribers, according to the firm.
MoffettNathanson reports that subscriptions to pay TV companies are down 0.5% over the last 12 months.
“That may not sound dramatic, perhaps, but it’s the fastest rate of decline on record and it represents by far the largest sequential acceleration we have seen to date,” Craig Moffett and Michael Nathanson, the lead analysts at the firm, write in the report.
The numbers are especially jarring considering the number of households continue to increase.
So people are not only “cutting the cord” — choosing to get their entertainment from a variety of streaming services like Netflix, Hulu and Amazon rather than from cable — but they’re also not signing up for traditional TV service when they move out on their own.
The MoffettNathanson report comes as there are more options than ever for people to watch TV over the internet. Netflix, the largest subscription streaming service in the world, has over 40 million paid subscribers in the US, and the company is spending hundreds of millions of dollars this year alone creating its own, original programming.
Sling TV, a service from Dish Network that launched in February, offers a slimmed-down version of TV channels — including ESPN — that can be streamed online starting at $US20 per month. Sony also recently launched its PlayStation Vue TV service, which streams live and on-demand TV to PlayStation owners in some cities, though the service is relatively expensive.
HBO last month launched HBO Now, a $US15-per-month streaming service that for the first time allows customers in the US to get HBO without subscribing to a cable package, and Showtime, another premium network, will launch its own standalone service this year.
As MoffettNathanson notes in its report, many of the newest services, like Sling TV, PlayStation Vue and HBO Now, hadn’t launched, or had just launched, during the quarter, so this is just the beginning of cord cutting.
“The genie is out of the bottle now,” the analysts write.
“It is only going to get worse… It’s too soon to panic. But it’s not too soon to be genuinely worried.”