4 NOV 2019

CORD CUTTING IN THE US WAS WORSE THAN EVER IN THE THIRD QUARTER

Led by continued massive customer losses at AT&T, cord-cutting for U.S. pay TV services will reach an attrition rate of -3.8% in the third quarter once all operator reports are in, MoffettNathanson predicts.

Share

Led by continued massive customer losses at AT&T, cord-cutting for U.S. pay TV services will reach an attrition rate of -3.8% in the third quarter once all operator reports are in, MoffettNathanson predicts. This represents a continued acceleration of cord cutting, which stood at just under -1% just 15 months ago.

The analyst firm outlined a cord-cutting picture even more dreadful than the previous quarter. In July, after AT&T, Charter and Comcast reported an aggregate of more than 1.2 million video subscriber losses, MoffettNathanson called it “freaking ugly”. Now, the firm is looking for a new phrase to describe the escalating situation.

“Since AT&T provided initial guidance of massive subscriber losses in early September, media investors have been bracing for an even uglier quarter than 2Q, which we labelled ‘freaking ugly,’” wrote Michael Nathanson, the author of the report. “With earnings now in the books for Comcast, AT&T, Verizon and Charter, we can definitively say that the early read on tradition cord-cutting is uglier than before,” he added.

According to the firm, those four video distributors have reported 1.74 million in aggregate video subscriber losses, 1.23 million worse than the 506,000 aggregate subscribers lost in the year-ago quarter. AT&T accounted for the biggest share of those losses, losing approximately 1.16 million premium video subscribers (DirecTV and U-verse) and another 195,000 AT&T TV clients for a total of about 1.358 million during the quarter.

As a result of the losses posted so far, MoffettNathanson estimates the rate of traditional cord cutting will hit 6.2% in the third quarter, which is the worst it’s ever been. After factoring in virtual MVPD additions, the rate comes down to 3.8% but that’s still a new low for the rate of all-in cord cutting.

“Even if Hulu Live TV and YouTube TV crush expectations this quarter, we still expect to see a dramatic continued acceleration in the rate of pay TV subscriber declines,” Nathanson concluded.

Tags
Related News
subscribe

to Señal News Newsletter

MOST READ STORIES