Even though the number of people leaving traditional pay-television for streaming services or other options remained a relative trickle into 2014, the Q2 and Q3 numbers from that year made it look like the trend was taking hold. But then things picked up for the pay-TV companies in Q4 of that year. 2015 showed a similar pattern, with the first and fourth quarters showing net gains for pay TV while the second and third quarters showed net losses. According to numbers released by Leichtman Research Group (LRG) in March 2016, pay-TV providers lost about 385,000 net video subscribers in 2015, compared to a loss of about 150,000 subscribers in 2014, and a loss of about 100,000 subscribers in 2013.
After two years, it appears a pattern has set in. Pay-television posts gains in the first quarter, loses customers during the next two, then recovers in the final part of the year with the overall loss being relatively trivial in a 94 million-subscriber universe. That patterns appears to be holding again as the big gains from Q4 2015 have been followed by the 13 largest pay-TV providers in the United States -- representing about 95% of the market -- adding 10,000 net video customers in Q1 2016, according to LRG.
The cable universe is shifting a little bit
While people are not fleeing pay-television in large numbers. there has been a shift in which companies and services people are using.
"While DirecTV and top cable providers had a comparatively strong quarter in 1Q 2016, their gains were largely offset by a historically weak quarter for AT&T (NYSE: T) U-verse," said LRG President Bruce Leichtman in a press release. That drop might seem alarming, but U-Verse and DirecTV are now both owned by AT&T, so the 380,000 subscribers lost by the cable service were almost made up by the 328,000 customers the satellite provider added. Still, when you do the math, AT&T lost 52,000 paying households, making it the big loser in Q1.
Comcast (NASDAQ: CMCSA), the biggest cable provider, could be considered the big winner as it added 53,000 customers during the quarter. In addition, Charter Communications (NASDAQ: CHTR) and Time Warner Cable (NYSE: TWC), two companies that are about to complete their merger, gained a combined 36,000 customers, the same amount Verizon (NYSE: VZ) added for its FiOS service.
Overall, the numbers are a little worse than they appear because roughly an estimated 665,000 people are now customers of DISH's(NASDAQ: DISH) Sling TV, a low-cost streaming service, and many of those might have abandoned a full cable package for that option. This was the first time LRG has included an estimate for Sling (which DISH does not break out in its earnings reports), but it has been slowly gaining momentum since launching in January 2015.
Leaving full-price cable for Sling is not exactly cutting the cord, but it's a blow to traditional cable and satellite since it's much cheaper than those services.
What happens in the second quarter?
If the pattern of the past two years holds true, big cable will post big losses in Q2, followed by a smaller drop in Q3, before staging a Q4 rally. It also seems likely that the numbers for Sling will continue to grow and that new skinny bundles will launch that increase the cord-shaving trend.
It's clear, however, from the last two years that while cord-cutting may be slowly building momentum, it's not yet a threat to the industry. From losing 105,000 pay-television customers in 2013, to dropping 150,000 in 2014, then 385,000 last year, pay-television has been on a steady decline that has not yet turned into a music or newspaper industry level disaster.
Given the similar numbers in Q1 for both 2015 and 2016, there are reasons to believe that cord-shaving may increase, but complete cord-cutting may have found its ceiling -- at least until streaming alternatives improve. If the numbers stabilize around the 385,000 drop from last year, then the industry can exhale a little bit, manage its slow subscriber attrition, and try to find alternative packages to keep consumers from leaving entirely. So far, 2016 looks a lot like 2015, which suggests that cord-cutting may well stall out before becoming a market-threatening trend.
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Has cord-cutting stalled?: Pay-TV gained customers in Q1.
An exterior view of Netflix headquarters is shown in Los Gatos, Calif., Friday, July 21, 2006. Netflix earnings report will be released after the bell. (AP Photo/Paul Sakuma)
Netflix Chief Executive Officer Reed Hastings holds up two of their most popular DVD rentals "The Perfect Storm" and "Crocodile Dundee in Los Angeles" at their distribution plant in San Jose, Calif., Monday, Sept. 10, 2001. Online DVD rental company Netflix is emerging as one of the Internet's rising stars that has attracted a cast of 300,000 subscribers who pay a $19.95 monthly fee to get up to three DVD rentals mailed to them. (AP Photo/Paul Sakuma)
400303 03: Ready-to-be-shipped DVDs roll down an assembly line January 29, 2002 in San Jose, CA. The online DVD rental site Netflix.com has 500,000 subscribers who can rent, receive and return unlimited discs per month by mail. (Photo By Justin Sullivan/Getty Images)
400303 01: Netflix.com Chief Executive Officer Reed Hastings holds a ready-to-be-shipped DVD January 29, 2002 in San Jose, CA. The online DVD rental site has 500,000 subscribers who can rent, receive and return unlimited discs per month by mail. (Photo By Justin Sullivan/Getty Images)
400303 05: Packages of DVDs await shipment at the Netflix.com headquarters January 29, 2002 in San Jose, CA. The online DVD rental site has 500,000 subscribers who can rent, receive and return unlimited discs per month by mail. (Photo By Justin Sullivan/Getty Images)
**FILE** Netflix customer Carleen Ho holds up DVD movies, "Talladega Nights" and "Pirates of the Caribbean' that she rented from Netflix, at her home in Palo Alto, Calif., in this Jan. 24, 2007 file photo. Netflix is expected to release quarterly earnings on Monday, July 23, 2007. (AP Photo/Paul Sakuma, file)
Close up of the Netflix's new set top box at Netflix headquarters in Los Gatos, Calif., Friday, May 16, 2008. Netflix Inc. on Tuesday will introduce its first solution for subscribers who want entertainment delivered directly to their television sets with just a few clicks on a remote control. The breakthrough comes in the form of 5-inch-by-5-inch device tailored for a year-old service that uses high-speed Interneet connections to stream more than 10,000 movies and TV shows from Netflix's library. (AP Photo/Paul Sakuma)
Netflix CEO Reed Hastings shows off their new set top box at Netflix headquarters in Los Gatos, Calif., Friday, May 16, 2008. Netflix Inc. on Tuesday will introduce its first solution for subscribers who want entertainment delivered directly to their television sets with just a few clicks on a remote control. The breakthrough comes in the form of 5-inch-by-5-inch device tailored for a year-old service that uses high-speed Interneet connections to stream more than 10,000 movies and TV shows from Netflix's library. (AP Photo/Paul Sakuma)
Actress Teri Hatcher, second from left, and actor James Denton, right, perform together with the celebrity cover band "Band From TV" at the "Netflix Live! on Location" concert and screening series at Griffith Park in Los Angeles on Saturday, Aug. 9, 2008. (AP Photo/Dan Steinberg)
FILE - In this July 20, 2010 file photo, a Netflix subscriber turns on Netflix in Palo Alto, Calif. Netflix's streaming-video audience of more than 20 million subscribers has led many to label it a kind of digital TV network, and one that may grow into an HBO rival _ if it's not already. (AP Photo/Paul Sakuma, file)
Actor Steven Van Zandt and wife Maureen Van Zandt attend the premiere of a Netflix original series "Lilyhammer" at the Crosby Street Hotel on Wednesday, Feb. 1, 2012 in New York. (AP Photo/Evan Agostini)
Netflix chief content officer Ted Sarandos and wife Nicole Avant attend the TIME 100 Gala celebrating the "100 Most Influential People in the World" at Jazz at Lincoln Center on Tuesday April 23, 2013 in New York. (Photo by Evan Agostini/Invision/AP)
Taylor Schilling, left, Cindy Holland and Piper Kerman attend the premiere of the Netflix original series "Orange is the New Black" on Tuesday, June 25, 2013 in New York. (Photo by Charles Sykes/Invision/AP)
A general view of atmosphere seen at the Netflix Emmy Party, on Sunday, Sep, 22, 2013 in Los Angeles. (Photo by Eric Charbonneau/Invision for Netflix/AP Images)
Ted Sarandos, Chief Content Officer, Robin Wright, Kevin Spacey and Cindy Holland, Netflix VP of original content seen at Netflix 'House of Cards' Los Angeles Season 2 Special Screening, on Thursday, Feb, 13, 2014 in Los Angeles. (Photo by Eric Charbonneau/Invision for Netflix/AP Images)
Ricky Gervais and Conan O'Brien seen at Netflix 'Derek' Season 2 Academy screening at the Leonard H. Goldenson Theatre on Tuesday, May 28, 2014, in North Hollywood, CA. (Photo by Eric Charbonneau/Invision for Netflix/AP Images)
The cast at a Special Fan Screening of Netflix's "Hemlock Grove" held at The Arclight Theater on Thursday, July 10, 2014, in Los Angeles. (Photo by Alexandra Wyman/Invision for Netflix/AP Images)
Laverne Cox at Netflix's FYC "Orange is the New Black" Emmy Panel on Monday, August 4, 2014, in Los Angeles. (Photo by Alexandra Wyman/Invision for Netflix/AP Images)
Ted Sarandos, Chief Content Officer of Netflix seen at the Netflix Celebration of 2014 TIFF on Sunday, Sep. 7, 2014, in Toronto. (Photo by Arthur Mola/Invision for Netflix/AP Images)
Actress Jacinda Barrett attends the Netflix original series premiere of "Bloodline" at the SVA Theatre on Tuesday, March 3, 2015, in New York. (Photo by Evan Agostini/Invision/AP)
IMAGE DISTRIBUTED FOR LG ELECTRONICS - Matt Lloyd, director of photography for Marvelâs âDaredevil," explains how OLED technology helps deliver his creative vision to audiences at LG and Netflixâs Dare to See OLED event, Wednesday, April 8, 2015 in New York. (Photo by Jason DeCrow/Invision for LG Electronics/AP Images)
Kevin Spacey seen at Netflix 'House of Cards' Academy Screening at AMPAS on Monday, April 27, 2015, in Los Angeles, CA. (Photo by Eric Charbonneau/Invision for Netflix/AP Images)
Tina Desai seen at the world premiere of the Netflix original series "Sense8" on Wednesday, May 27, 2015, in San Francisco, CA. (Photo by Eric Charbonneau/Invision for Netflix/AP Images)
Jane Krakowski, from left, Tina Fey, Ellie Kemper and Robert Carlock arrive at Netflix's "Unbreakable Kimmy Schmidt" Q&A Screening at Pacific Design Center on Sunday, June 7, 2015, in West Hollywood, Calif. (Photo by Rich Fury/Invision/AP)
attends Netflix's "Orange is the New Black" ORANGECON Celebration at Skylight Clarkson SQ on Thursday, June 11, 2015, in New York. (Photo by Evan Agostini/Invision/AP)
This June 24, 2015 photo shows the Netflix Apple TV app icon, in South Orange, N.J. (AP Photo/Dan Goodman)
Director/Producer, Hot Girls Wanted- Jill Bauer, Director, What Happened, Miss Simone? - Liz Garbus, Director, Virunga - Orlando von Einsiedel, Director, Chefâs Table - David Gelb and Subject and Executive Producer, Tig - Tig Notaro seen at Netflix 2015 Summer TCA at the Beverly Hilton Hotel on Tuesday, July 28, 2015, in Beverly Hills, CA. (Photo by Eric Charbonneau/Invision for Netflix/AP Images)
FILE - In this March 13, 2007 file photo, Steven Avery listens to testimony in the courtroom at the Calumet County Courthouse in Chilton, Wis. The Netflix documentary series âMaking a Murdererâ tells the story of a Wisconsin man wrongly convicted of sexual assault only to be accused, along with his nephew, of killing a photographer two years after being released. An online petition has collected hundreds of thousands of digital signatures seeking a pardon for the pair of convicted killers-turned-social media sensations based on a Netflix documentary series that cast doubt on the legal process. (AP Photo/Morry Gash, File)
Netflix CEO Reed Hastings gives a keynote address, January 6, 2016 at the CES 2016 Consumer Electronics Show in Las Vegas, Nevada. AFP PHOTO / ROBYN BECK / AFP / ROBYN BECK (Photo credit should read ROBYN BECK/AFP/Getty Images)