The acceleration of cord-cutting and cord-nevering is due more to costs than virtual MVPD growth, Charter Communications CEO Tom Rutledge said Wednesday at a MoffettNathanson event. He said subscriber losses over the past five years are at the margins, with the bulk of customers sticking with pay-TV packages. Programmers increasingly are interested in "rekindl[ing] an affiliation" instead of just a transactional relationship, with Charter helping them sell their products, Rutledge said. He said in coming years, the cost trajectory for content "is marginally going to change to our benefit, but not much. On the edges, there's a lot of pressure on the price for content companies."

Pay-TV's largest-ever Q1 subscriber loss is because "existing without pay TV is now viable for many," nScreenMedia's Colin Dixon wrote Monday: The cord-cutting trend is due to a confluence of issues, including more availability of premium sports programming and quality scripted shows online, increased consumer love of subscription VOD, and decreased complexity in watching since setting up a Roku or smart TV has become largely intuitive. The analyst said such cord cutting will accelerate amid increased costs of pay-TV packages.

Cord-cutting is accelerating, with more than half of cord-cutters canceling legacy pay-TV service in 2015 and 2016 -- a third of them in 2016 alone, The Diffusion Group (TDG) said in a news release Thursday: That acceleration is due to higher pay-TV pricing and the rise of on-demand services, it said, saying the trend is compounded by a growing number of virtual MVPDs that somewhat mirror legacy MVPDs but are also somewhat customized. TDG said most legacy operators -- Comcast a key exception -- "are rushing into the skinny-bundle trap" by offering cheaper offerings that are in turn accelerating the decline of the traditional bundle. It said legacy operators need either to "resign themselves to being a 'dumb-pipe' provider" or to invest in IP with the aim of becoming "the go-to source for all things video" -- a direction Comcast is turning.

The skinny bundle in the U.S. "is a fiction" for now, though an $8-$12 monthly package will be offered at some point, akin to what's available in other markets internationally, Discovery Communications CEO David Zaslav said in an analyst call Tuesday. So-called skinny bundle offerings in the U.S., with prices closer to $40 monthly, are "overstuffed turkeys." He said subscription VOD offerings like Netflix and Amazon Prime are effective, but "we as an industry need to complement that with a quality offering ... that's a true skinny bundle in the spirit of what's working around the world, and I think that'll happen." Discovery said Q1 revenue was $1.6 billion, up 3 percent due to gains in global distribution sales and progress in expanding digital and direct-to-consumer businesses. Zaslav said since the start of the year, the company has expanded its Amazon SVOD channels partnership and Eurosport Player streaming service and entered into a number of new digital partnerships, including creation of a streaming over-the-top service in Europe.

CBS and its affiliated stations signed an agreement that opens the door for stations to have their local signals as part of the CBS All Access subscription service and carried by over-the-top platforms like YouTube TV and Hulu, the company said in a news release Tuesday. CBS said the distribution agreement includes additional revenue opportunities for the affiliates and has affiliated stations joining the networks in distributing premium content to skinny bundle offerings.

The over-the-top industry has been its own enemy in facilitating TV Everywhere, but reaching every device "is about to get simpler" with Google's Widevine, Adobe's Primetime and now Microsoft adding cyber block chaining (CBC) support, said Irdeto Perspective Product Manager Rodrigo Fernandes in a blog post Friday. Irdeto said the problem started with digital rights management fragmentation, with the various forms of DRM supporting different media containers. Current MPEG dynamic adaptive streaming over HTTP and common media application formats are largely agnostic, but encryption of them for pay services is complicated by the multiple encryption technologies available, it said. The increasingly universal cyber block chaining support means one encrypted stream will cover all devices, ending duplicated content delivery network costs, it said.

Scripps Networks Interactive will begin producing shows for Snapchat's Discover platform, the programmer said in a news release Thursday. The deal including HGTV and Food Network builds on a previous arrangement where Food Network was one of the first publishers on Discover at its 2015 launch, and has been creating Publisher Stores for the platform since then, it said.

Viacom is in talks about creation of a skinny bundle package of content, and such offerings from programmers "will be a catalyst for more," CEO Bob Bakish said during an analyst call Thursday. "Everyone acknowledges there's a marketplace opportunity there." While licensing content to subscription VOD offerings, one big Viacom goal is ensuring it's not undercutting itself by creating inexpensive alternatives for consumers to access its content, he said. Pointing to Hulu carrying some Nickelodeon content, he said while Viacom builds out its own consumer products business, it makes sense to have some content available across multiple platforms. Bakish said the uneven subscriber results being reported by different MVPDs reflects differences in execution, and the industry overall needs to put more focus on the product and marketing. He said Charter Communications is retiering some of its channels for new subscribers -- an issue still the focus of talks between the two. Viacom said Q1 revenue was up 8 percent, to $3.26 billion, driven largely by filmed entertainment and more affiliate revenue. The CEO said as part of Viacom's announced turnaround plan (see 1702090029), Paramount has a new leadership team in place and MTV is installing a new team and pivoting to a new programming pipeline with a heavier focus on unscripted content. The programmer's stock closed down 7.7 percent to $37.85.

Pressures on the pay-TV sector show cord-cutting and cord-nevering are accelerating, while advertising dollars increasingly are shifting to mobile, BTIG Research analyst Rich Greenfield wrote Wednesday. He said MVPDs appear to have lost at least 450,000 subscribers in what is traditionally a seasonally strong quarter, and that loss comes even as virtual MVPDs added more than 300,000 subscribers. "Scary when you think about a seasonally weak Q2" and the launch of more virtual MVPDs like YouTube TV and Hulu Live, he said.

Q1 is usually strong for pay TV, but not this year, with subscriber numbers "suggest[ing] a litany of worst-evers" as cord-cutting is coming in full force, MoffettNathanson analyst Craig Moffett wrote investors Wednesday. Citing publicly traded MVPDs that have reported results, he said linear video subscriber losses are setting a new record for the rate of decline and for acceleration in rate of decline. Moffett said even adding in virtual MVPD subscribers, subscriber growth still declined. The cumulative number of households not subscribing to pay TV "is much too big to ignore, and it's only getting bigger," the analyst said, saying password sharing is potentially one large issue. "Perhaps the most obvious takeaway of all is that the [virtual MVPD] business looks like a truly awful one ... if the goal is to, say, make money," said the note. Time will tell which approach to dealing with declining video subscriber numbers -- Dish Network's or Charter Communications' -- will win out, said nScreenMedia analyst Colin Dixon in a blog post Tuesday. The two approaches are markedly different, he said, with Dish hoping to recapture cord-cutters through its cheaper, lower-margin Sling TV and Charter banking on exclusive content to slow the decline. "The attitude to change" is at the heart of the difference between the two, he said. Charter sees the decline as part of a long-term but orderly decline in MVPD subscribers, while Dish -- seeing the same trend -- "also sees an opportunity to take advantage of the change, and maybe even drive it," he said. The companies reported Q1 subscriber and other results this week (see 1705020053 and 1705010041).