Covid-19 Just Triggered The Worst Quarter Ever For Cable TV 'Cord Cutting'
from the the-check-is-coming-due dept
2019 saw a record number of consumers ditch traditional cable television. 2020 was already poised to be even worse, and that was before a pandemic came to town. With the pandemic not only sidelining live sports (one of the last reasons many subscribe to traditional cable in the first place), while putting a strain on many folks’ wallets, cord cutting has now started to truly take off. Wall Street analyst Craig Moffett, who a decade ago suggested such cable TV defectors were irrelevant, has long since changed his tune.
In his latest research note to investors, he laid out the reality for traditional cable TV providers, and it’s really not pretty. It’s particularly ugly for satellite TV providers like Dish Network and DirecTV:
“Traditional Pay TV subscriptions fell by a record 1.8M in Q1, the worst quarterly result on record, bringing the annual rate of decline to 7.6%, also a record. Things were particularly bad for satellite TV, where subscriptions plunged by over 1.0M for the third quarter in a row, bringing the annual rate of decline to a worst-ever 14.3% (the number would be worse still if we were to include lost bars, restaurants, and hotels temporarily suspended at Dish Network).
Traditional cable TV providers like Comcast fared “better,” but it’s still simply not pretty:
“Cable?s decline of 0.6M subscribers in the quarter, for annual growth of -4.0%, looks positively gentle by comparison. But it, too, was the worst on record. At 63% of occupied households, traditional Pay TV penetration has reached a level not previously seen since roughly 1995. There are now as many non-subscribing households (46M) as there were Pay TV subscribers in 1988.”
Granted many of these companies had more than a decade to get ready to combat this very obvious trend, and instead decided to double down on all the things that drive users to the exits: high prices, endless price hikes, inflexible cable channel lineups, and terrible customer service. The idea for many broadcast and cable execs has been to milk this dying cash cow for as long as was possible before actually attempting to adapt. We’ve now reached the point where doing nothing simply isn’t going to work.
But even the companies that made a fleeting effort to pivot to cheaper, more flexible streaming services (AT&T, Sling TV) got pummeled last quarter:
“The vMVPDs, once viewed as the last line of defense for cable networks, imploded in Q1,? Moffett writes. Collectively, he estimates they lost 341,000 subscribers in the quarter. ?Sony?s PlayStation Vue service shut down at the end of January. Their ~500,000 subscribers appear to have gone …nowhere. AT&T TV Now (formerly DirecTV Now), Sling TV, and (we believe) fuboTV all lost subscribers. Disney?s Hulu Live TV appears to have hit a wall in the wake of multiple price increases, growing by only ~100,000 subscribers in Q1, an abrupt deceleration from their recent torrid growth. Even YouTube TV, by far the fastest-growing of the lot, couldn?t pick up all the slack. Total subscriptions, including both traditional and vMVPDs, are now shrinking by 5.3% per year. Yes, that, too, is the worst ever.”
There’s a number of reasons for that. AT&T, for example, tried to jack up the price of its streaming video services to recoup massive debt incurred by its recent bout of mindless megamerger mania. As the streaming sector began offering users too many siloed exclusives, the confusion and cost of hunting and pecking drove many users to piracy. Many other users simply migrated to over the air antennas. And that’s before you get to the fact that many younger viewers don’t see the point of cable TV in any form, and prefer simply watching YouTube or Tiktok for free.
To be clear, the cable TV sector still laid claim to 83 million subscribers in the United States by the end of last year. And many of the biggest companies (like AT&T, Verizon, and Comcast) should be fine, given they can just jack up the price for broadband thanks to regional monopolies over internet service. But with the dearth of sports and consumer financial headaches likely persisting throughout 2020, downplaying or ignoring one of the biggest trends in TV history is no longer an option for some of the least liked companies in American industry.
Filed Under: cable tv, cord cutting, covid-19
Comments on “Covid-19 Just Triggered The Worst Quarter Ever For Cable TV 'Cord Cutting'”
You Only Need One Channel™
Nothing like being home 24/7 to make you realize that having 300 channels just means that you’re paying for 300 things you don’t want to watch.
Re: You Only Need One Channel™
Or, if you’re lucky, 299.
Sounds eerily familiar?
"Granted many of these companies had more than a decade to get ready to combat this very obvious trend, and instead decided to double down on all the things that drive users to the exits: high prices, endless price hikes, inflexible cable channel lineups, and terrible customer service."
So in other words exactly like the rest of the media industry since the invention of the internet. Will we see Cable CEO’s pull a Sony and exclaim how nothing good ever came from the internet now?
Or are they just quietly going to lobby for making all these online platforms legally impractical?
Error in title
Should be: Covid-19 Just Triggered The Best Quarter Ever For Cable TV ‘Cord Cutting’
Where's The Beef?
With a large percentage of the cable bill going towards live sports and brand new shows, who wants to pay top dollar for no sports and reruns? If I were in charge of a cable company, customers would have been getting a refund for staying subscribed. To think that everyone else around the world must make sacrifices during the lockdown, but not cable tv, that’s just delusional. Cable didn’t deliver.
Re: Where's The Beef?
How dare we hold companies accountable to the free market. Free market means that they have the freedom to gouge and price mark. Not that freedom to fail if they mess up! It’s capitalism! Companies first!
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Re: Re: Where's The Beef?
Are you another slanty eyed Chinese gook?
Re: Re: Re: Where's The Beef?
That term refers specifically to the Vietnamese, not Chinese. Yet again, racists are too stupid to understand even the words they invented.
Re: Re: Re:2 Where's The Beef?
"Yet again, racists are too stupid to understand even the words they invented."
Lack of imagination and bad education are the two most prevalent criteria when it comes to racism and bigotry, after all.
There’s a reason why their arguments are always a form of primal scream guided by the same sort of logic you’d expect to find in a rabid dog.
Re: Re: Where's The Beef?
Sounds about right. My beef with cable TV has always been that you can’t pick an a la carte option of channels you DO want. You have to take the ones you don’t along with the ones you do, which often means getting two or three packages just to get the channels you want to watch.
The new broadband TV services are a bit better, at least here in the UK. We get subscription services such as Netflix and Amazon Prime. I’m with Now TV so if I want to follow one particular series and am not interested in anything else, I have to subscribe to the TV service to get it.
It would be lovely to have a library service where we could get access to the shows and films we wanted on demand without having to pay for crap we’re not interested in as well. If that meant paying a small charge per series and per film, I’d be fine with that. As it is, we don’t own what we buy online and the rental charges are a bit steep if you add them up.
I can drop the service I’ve got when I want to, which is handy and when all is said and done it is a decent deal. I’d just like to be able to get at anything I want to see instead of hoping for the best when I sign in.
Re: Re: Re: Where's The Beef?
If you got what you wanted, and paid for each show and movie individually, you would probably end up paying a lot more (if you watch much of anything) than just subscribing to one or two services. At the end of the day, it doesn’t matter how many shows you’re not watching. What matters is how much value you’re getting out of the service and how much you’re paying for it. Who cares if your chosen service has 20 or 500 or 10,000 things you don’t want to watch, as long as the price is worth what you do want to watch?
Re: Re: Re:2 Where's The Beef?
Therein lies the rub. The price is not worth it for what little you do want to watch.
Re: Re: Re:3 Where's The Beef?
That is a question that must be answered by each consumer. Plenty of people find sufficient value in various streaming services to subscribe.
Re: Re: Re:4 Where's The Beef?
I’m always confused when people claim there’s nothing to watch on streaming services. I got Disney+ for free last month (my ISP package threw in a 6 month sub because I subscribe to their movie service). But, I also have Netflix, and annual subs to Prime, Shudder and MUBI. I haven’t watched anything on Disney yet because there’s too much for me to get through on the other services.
I know my tastes do venture further outside of the mainstream than most people, but I’m genuinely mystified how some can claim there’s nothing worth watching, I have the opposite problem where there is not enough time physically available to watch everything I want, and I’m going to have to suspend my monthly subs temporarily so I can catch up – and I had that problem while not being able to leave the house to do anything else but work and watch movies!
AT&T: Am I out of touch? No, it’s the children who are wrong.
Dish: Am I out of touch? No, it’s the children who are wrong.
Comcast: Am I out of touch? No, it’s the children who are wrong.
Re: Re:
Newsflash: Companies think they are entitled to your money. They are not. Film at eleven.
Re: Re:
This meme is already outdated and cringey.
Re: Re: Old meme
Agreed. I wanted to point out how silly it was that even in a situation where more people than ever are staying at home and consuming entertainment that is designed exactly for staying at home, TV companies were STILL unable to retain customers. I also wanted to point out how – like Quibi – they seem to be so clueless about why everyone isn’t continuing to overpay for their content.
Then I got lazy and decided to adapt one of last week’s "funniest/inisghtful" winners.
Re: Re:
You’re out of touch, you’re out of time
These execs must be out of their mind
(based on a song by Hall And Oates)
curious as to what excuses are being used to belay this ‘phenomenon’? are there in fact any excuses left?
Re: Re:
belay. seldom anymore get run to the dictionary, but you got me trotting on that one.
tried to understand the technical meaning but the words surgeon’s knot, locking knot, and knot in the running end kept interfering. calf rope.
I cut the cord 8 years ago. My cable bill was going up and up and up. I kept cutting things until there was nothing left. I was tired of the sky-high bill every month and for 1 person. There was no way I could watch enough TV or use the Internet to justify that bill every month.
These days, you know what they are doing. Trying to get the internet only, it’s expensive. They jack up the prices. Last time I got the dumb bundle of TV and Intenet. it was basic TV channels and included a basic cable box. But it was cheaper to get that dumb bundle than then internet-only!!!! I left the cable box in the Box is came in and NEVER used it. I’d have to wire my house to use that box that I didn’t want to use. I didn’t give a crap about those TV channels when I could get all of them with the Antenna anyway which I could DVR, unlike that cheapo cable box.
This is how they have been trying to keep their TV subscriber numbers UP. They pretty much force people to get the TV to get cheaper Internet. I also call up every year to get on some new bundle for another year. That’s a great way to save more money. I can save around $40 a month just doing that. That’s $480 staying in my own pocket per year. You have to call every year otherwise once the year is up, it jumps up to the normal price. You don’t want to pay their normal price so you call again and get on a new dumb bundle to drop the price back down once again.
Now if they can only figure out how to get people to abandon the internet.
Re: Re:
Why?
To bad.
To bad that the High end dont get it.
Int he old days, top wages were based on sales, and if this had happened, they wouldnt be getting a pay check.
Which really forces them to find a Way to get people onto the services and to buy a product.
When a person makes sooo, much money that they dont have to Think about the customer…Things are abit wrong.
The Fun part in this is the situation, and wondering WHY they quit in the last few months. As sitting at home and watching TV, would be very common, Unless— They had time enough to read all those contracts. And figure out they will be paying allot more at the end of this situation.
Im wondering how well the heads of the corps are doing. They had the ability to Cut 1/2 of the workers that were PART TIMERS.. And the rest went to full time. NOW the corps see’s that a few extra dollars in 1/2 the workers does pretty well. Why bring back the other 1/2.
"The Fun part in this is the situation, and wondering WHY they quit in the last few months. As sitting at home and watching TV, would be very common, Unless— They had time enough to read all those contracts. And figure out they will be paying allot more at the end of this situation."
I’d say it’s more to do with 30+ million Americans suddenly finding themselves unemployed without a decent social safety net, and frivolous entertainment expenses found themselves cut as result.
I got confused every time I saw the word "worse" in this article.. Seems like the best quarter for cord cutting to me
This may be profitable
This business strategy may be profitable, think "sell short". Why can’t TV/Cable execs invest in the failure of their industry? They need only invest in futures which expect their company stock to decline in value. Perhaps a third party intermediary is needed to hide the activity, I don’t know investing law well enough to know.
If this is profitable and doable (aka any illegality is factored in and still profitable), why should not investing in failure profitable be for the execs?
Remember, this is 2020; corporate execu-incest is running full speed ahead. The execs in TV/Cable are also on the board of directors of other companies. When their TV/Cable company fails, or something happens requiring a change in execs, then corpro-cronyism kicks in and a new place is found for each of the "insiders".
<sexism>"WARNING: SEXISM ahead" This also plays into why so few women are in the upper echelons of corporate world. The "insiders" appear to believe that most women can’t keep their mouth shut and won’t take the temporary hit when something goes bad. Thus, the corporate cronies (including the women who ARE inside) keep their little scheme to themselves and exclude anyone who won’t play by their rules. </sexism>
A corporation is only a tool for the enrichment of the "correct" people. Which explains why corporations support both political parties (in the U. S.). As long as both parties need the support then this (rigged) game continues.
Re: This may be profitable
No guarantee that the cable company stocks will decline in value. Sure they’re losing linear TV subscribers, but as long as telephone companies continue to do such a poor job of upgrading existing xDSL lines, cable will continue to have a semi-monopoly over the last mile of the broadband Internet with which they can continue to screw the public.
Re: This may be profitable
Highly illegal, and if their shareholders found out there would be jail-time.
Shareholders have rights; traded companies are legally obligated to maximise profit.
Re: Re: This may be profitable
No, they are not.
https://www.lawschool.cornell.edu/academics/clarke_business_law_institute/corporations-and-society/Common-Misunderstandings-About-Corporations.cfm
At least small-town USA has OTA TV to fall back on
I’m in the 1000 Islands, on the Ontario-New York State border, less than fifty miles from Watertown NY (pop 27000) and Kingston ON (pop 123798). Try to scan for digital channels on an antenna here and expect to see something like this: WWNY-DT 7 (7.1 CBS-HD, 7.2 Fox) CKWS-DT 11 (11.1 Global HD O&O) WVNC-LD 24 (45.1 NBC-HD, 45.2 Antenna TV, 45.3 Grit, 45.4 Bounce 45.5 Court) WPBS-DT 26 (16.1 PBS-HD, 16.2 Create, 16.3 World, 16.4 PBS Kids) WWTI-DT 31 (50.1 ABC-HD, 50.2 CW-HD, 50.3 Laff, 50.4 Mystery) WNYF-CD 35 (28.1 Fox-HD, 28.2 MeTV).
That’s sixteen unique digital subchannels from five stations in the 182nd largest metropolis in America. From Canada? All but one station in our region is either off-the-air or about to go dark. Worse yet, the stations are owned by the networks – who are owned by the same large corps who own the telephone/dish/cable duopoly and therefore have a vested interest in seeing OTA in Canada fail. It’s as bad as México, where Televisa owns most of everything and Azteca owns almost all of what’s left. The US system is broken, but things are much worse across the borders.