There’s a “delicious irony,” MoffettNathanson says, in Netflix “leaving cable nets for dead” as it excluded them from its proposed $83 billion purchase of Warner Bros. Discovery.
As the equity research company explains in its Q3 2025 “Cord-Cutting Monitor,” the outcome for those channels might not be as terminal as many had assumed.
According to the report, pay TV — virtual operators like YouTube TV included — actually added 303,000 net subscribers in Q3. “Let that sink in for a moment,” wrote report author Michael Nathanson. “There are more linear video subscribers now than there were three months ago. That’s the first time we’ve been able to say that since 2017.”
The firm did note the quarterly gains are “almost certainly seasonal” with Q3 coinciding with the start of NFL and that the sequential growth all came from virtual MVPDs.
Year over year, the industry is still declining — albeit by a lesser quarterly percentage. While the rate of decline was -6.7% in the third quarter of 2024, it was only -5.8% in the most recent July - September period.
Traditional pay TV — i.e. cable and satellite — still declined quarter over quarter in Q3, but again, by less. The YoY rate of attrition dropped from -12.4% to -10.2% over 12 months.
“Still … there are some genuine green shoots here,” Nathanson notes.
Not surprising to those who closely observe the struggling pay TV industry, the analyst cites Charter Communications’ innovative strategy of including premium ad-supported SVODs in linear video tiers. Now bundling nine services, including Hulu, Disney+, ESPN Unlimited, HBO Max, Peacock, Paramount+ and Fox One, Charter saw video net attrition decline from 294,000 in Q3 2024 to only around 70,000 for the most recent third quarter.
Charter has achieved these results with only about half of the customers who have access to the SVODs actually activating them, according to company CEO Chris Winfrey.
"So why wouldn't it be 100% [participation]?," Winfrey asked Tuesday, while appearing at the UBS Global Media and Communications Conference. "And therein comes the rub, which is, customers have become so accustomed to a promotional offer or for lack of a better word — a temporary gimmicky-type offer — that getting them to understand and buy in that this is permanently included as part of your subscription is included for free. It's not a gimmick."
Not only has Charter’s strategy improved the value of its video services, it made the cable operator “believe in video again,” Nathanson notes.
In Q3, Charter’s improved metrics combined with what has typically become a big quarter for virtual MVPDs, as seasonal users returned to the fold to get their football fix.
“It was the improvement at Charter that made it possible for the growth at vMVPDs to put the whole industry into positive territory,” wrote the firm.
Having raised its monthly price to $83 in January, market leader YouTube TV didn’t have as big a third-quarter growth bender as it’s had in previous years — MoffettNathanson estimates the Alphabet service only added around 750,000 subscribers during the period, verses around 1 million a year prior. Total vMVPD additions for Q3 came in at 1.429 million, according to the report, up from 1.361 million a year prior.
It was enough to put the aggregate sector in the quarter-to-quarter black for the first time in eight years.
“We’re still very much in the ‘less bad’ phase,” Nathanson warns. “Yes, Q3 saw a positive net add number for the first time in eight years, but that positive result came in the year’s seasonally strongest quarter. We’re not yet close to seeing the category actually grow again … But might we eventually?”