Cord cutting is denting the US pay-TV customer base
Like other pay-TV service operators, AT&T (T) is facing a decline in its US pay-TV customer base due to cord cutting. In the fourth quarter, AT&T lost 391,000 traditional US pay-TV customers. This number includes 403,000 satellite TV customer losses and 12,000 U-verse TV customer gains. In addition, Comcast (CMCSA) and Charter Communications (CHTR) lost 19,000 and 36,000 residential video customers, respectively.
This reduction in the company’s US pay-TV customer base is mostly the result of the increasing popularity of OTT (over-the-top) offerings.
Millions of consumers have already swapped traditional pay-TV services for OTT, as OTT services directly provide content to users over the Internet at lower rates than a satellite TV or cable connection.
Currently, Amazon Prime Video, YouTube TV, and Netflix (NFLX) are popular streaming service providers. In the fourth quarter, Netflix added 8.8 million customers worldwide.