Michael Balderston
Source: tvtechnology.com, May 2019
More than a million cut the cord, but that may not be the most impactful result.
NEW YORK—Media and telecom researcher MoffettNathanson is suggesting that it could be time for traditional pay TV services to grab a lifejacket, as the first quarter of 2019 brought about the largest number of cord-cutters yet.
The combined losses from cable, satellite and Telco TV equaled 1.4 million subscribers, 75% worse than over the same period in 2018. It was also the largest rate of decline in terms of percentages at -4.8%.
However, despite hitting a new low, MoffettNathanson’s researchers make the argument that that is not the key takeaway. While the number of people cutting the cord is increasing, those signing up for virtual multichannel video programming distributors (vMVPDs) is not growing as expected, having slowed “significantly” in Q1. As a result, total distribution for cable networks saw its worst-ever decline of 1.9%.
While traditional services continue to decline, MoffettNathanson looks to past history to forecast that media companies will raise rates to make up for its losses, which could further accelerate declines. But it’s not a net gain for vMVPDs. Many have added more networks into its lineups—something MoffettNathanson said they have been “forced” to do.
“The more the vMVPDs mirror the channel bloat of the traditional MVPDs, the more their growth, too, will stall,” the report reads. “And the more the programmers will have to raise prices to fill the gaps.”
To read the full report, visit MoffettNathanson.com.
