CORD-CUTTING ACCELERATES IN THE USA, WITH HIGHEST-EVER LOSSES

Traditional cable and satellite TV providers posted their largest quarterly subscriber losses in the first three months of 2020, with the top ten U.S service providers losing over 2 million subs in first quarter of 2020. MoffettNathanson Research noted that a sharp decline in pay-TV subscribers last quarter “raises the possibility of a rapid death spiral for the entire category” in a report that describes Covid-19’s trends of acceleration toward SVOD and AVOD. “It has been often observed these past few months that crises don’t change technology trends so much as they accelerate them. The cord-cutting trend was obviously well underway long before the current COVID-19 crisis. But the rate of change is being unmistakably sped up.” wrote MoffettNathanson’s cable and entertainment analysts.

The Multiscreen Index reports the subscriber counts that were revealed by service providers, rather than analyst estimates. The latest study showed that the top 10 US services now have a total of 74.65 million television customers, accounting for 62% of television homes. With most quarterly earnings in for the sector, the tally is that traditional pay-TV subscriptions fell by 1.8 million in the first three months of the year, the worst quarterly result on record, bringing the annual rate of decline to 7.6%, the fastest shrinkage of the sector in history, according to the report. Cox Communications is not included in the top 10 as it does not report its numbers. Two years ago, leading players accounted for just over 84 million. The study found that AT&T lost the most subscribers, 897,000 Premium TV customers and a further 135,000 At&t TV Now subscribers, for a combined loss of over a million. Dish Network ended the first quarter with 382,000 fewer satellite television subscribers and 281,000 fewer for its Sling TV online television service.Some of th reasons analysts blame for the decline include high prices as a result of the backdrop of record unemployment and the loss of live sports. Cord-cutting figures are expcted to increase even further in Q2, as the economic fallout from the coronavirus takes a deeper bite. “There are now as many non-subscribing households, 46 million as there were pay-TV subscribers in 1988.”  UBS Securities Analyst, John Hodulik said. “The outbreak could drive a modest acceleration in cord-cutting in the lockdown phase but more dramatic declines post-lockdown given the expected recession. The absence of sports should pressure sports nets in the near term as distributors balk at paying high fees and post-lockdown if sports (especially professional and college football) do not return in the fall, potentially creating a cord-cutting perfect storm.” 

Cable company, Comcast lost 388,000 television subscribers, its twelfth consecutive quarterly subscriber loss. Its total dropped below 20 million for the first time in almost two decades while the telco TV space Verizon TV subscribers declined by 84,000, marking 13 consecutive quarterly falls, bringing subscriber counts down to 4.07 million, from its highest number of 5.86 million four years ago. Other significant declines were recorded by Charter Spectrum which lost 70,000 television subscribers, marking its ninth consecutive quarterly loss, down by over 400,000 in twelve months to 15.55 million. Altice, Mediacom, and Frontier lost 97,700 television subscribers between them in the quarter and a total of 372,600 over twelve months. Informitv also noted that it was difficult to assess how far such losses could be attributed to economic conditions and how much to an accelerating long-term structural decline.“This is the largest quarterly loss of television subscribers in the United States we have reported to date,” noted Dr. William Cooper, the editor of the Informitv Multiscreen Index commenting on the results revealed. "The coronavirus pandemic has contributed to this, but many service providers have been losing subscribers for some time. Notably, their newer online services are now no exception to this trend.” 

Generally, on a net basis, none of the 2 million or so traditional distributor losses landed with vMVPDs. Virtual TV players, including AT&T TV Now, Dish’s Sling TV, Hulu + Live TV, YouTube TV, and FuboTV, collectively lost an estimated 341,000 subscribers in Q1, per Moffett’s calculations. That indicates that former subs to Sony’s PlayStation Vue , which ceased service at the end of January "appear to have gone nowhere."  The only notable subscription-TV services to add subscribers in the first quarter of 2020 were Hulu + Live TV, which picked up about 100,000 to stand at 3.2 million, and Google’s YouTube, which netted approximately 300,000 to reach 2.3 million per Moffett’s estimate. 

Some of the largest media companies, including Disney, NBCUniversal, and WarnerMedia, have launched or will soon launch direct-to-consumer streaming services. Disney Plus gathered 54.5 million customers worldwide as of 4 May, less than six months after its initial launch. HBO Max will join later this month, as well as NBC's Peacock, which is slated for a national rollout in July. “Notwithstanding the princely valuations being accorded SVOD platforms like Disney+, we doubt the DTC lifeboats will ever come close to matching the profitability of the business they are ostensibly designed to replace,”  Moffett wrote.