Pay-TV Industry Suffers Record Losses in Q1 2020 as Cord-Cutting Accelerates Amid COVID-19 Pandemic
Cable and satellite television took quite the tumble in Q1 2020 due to the coronavirus, and industry analysts believe the numbers will continue to plummet in the aftermath. According to a new study by MoffettNathanson, between high prices and the loss of live sports, the pay-TV sector lost a whopping 1.8 million subscribers in the first quarter alone. With unemployment rising by the day and a recession pending post-pandemic, analysts believe the numbers will drop further.
“At 63 percent of occupied households, traditional pay-TV penetration has reached a level not previously seen since roughly 1995,” analyst Craig Moffett wrote in a research note today, according to Variety. “There are now as many non-subscribing households (46M) as there were pay-TV subscribers in 1988.”
While satellite took the brunt of the losses, virtual pay-TV providers also took a hit. According to The Hollywood Reporter, the MoffettNathanson report “said they believe that fuboTV lost subscribers in the first quarter just like Sling and AT&T TV Now, while ‘Disney’s Hulu Live TV appears to have hit a wall in the wake of multiple price increases, growing by only about 100,000 subscribers in the first quarter, an abrupt deceleration from their recent torrid growth.’”
Just yesterday, during the Q1 earnings reports, Dish Network chairman Charlie Ergen pointed out the various ways pay-TV is inconvenient for consumers. Outside of cost, Ergen also emphasized that ad-load, overall user experience as well as network branding have all affected the way consumers interact with pay-TV.
Though streaming seems to be the preferred mode of watching TV currently, Variety noted that Moffett believes it won’t be as fiscally beneficial in the long run. Moffett stated: “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.”