Cord cutting is gaining steam.
Pay TV services recorded their biggest-ever quarterly drop in subscribers, losing 625,000 TV customers, according to a report Thursday from the research firm SNL Kagan.
While about 100.4 million households still pay for traditional pay TV, the report underscored investors’ fears that cord cutting is gaining momentum and starting to fray the TV industry’s business model.
Those fears led to a selloff in media stocks last week, with entertainment companies losing more than $60 billion in value over two days. Top program suppliers such as Walt Disney, Time Warner and Viacom, which rely on subscriber fees and advertising for their revenue, were hard hit.
Cord cutters are dropping pay TV packages that cost an average of $87 a month in favor of online services from Netflix and Amazon.com priced at under $10. That’s led to falling viewership at many cable networks, hurting ad sales and threatening to reduce subscriber fees.
Comcast, Dish Network and other conventional pay TV distributors are trying to keep customers by offering discounted packages that have fewer channels and Internet access for online viewers.
At a media conference Thursday, Time Warner chief financial officer Howard Averill said subscriber losses at the company’s Turner channels “have been a bit more than we expected,” but he didn’t predict that cord cutting would accelerate.
About 85 percent of the revenue from Time Warner’s Turner division comes from four channels — TNT, TBS, CNN and Cartoon Network. That puts the company in a good position, he said, as “skinny” TV bundles become more popular and Turner’s biggest channels are included in them.