Cable, satellite TV see sharp drop in customers
Americans are cutting the cord, and TV providers are feeling the pain.
As the coronavirus pandemic swept through the country, cable and satellite-TV companies experienced a steady drop in paying customers.
About 1.8 million American households canceled subscriptions during the first quarter of 2020, Variety reports.
More alarming for cable companies is that the second quarter — with most of the country in lockdown mode — could cause even more hemorrhaging, analysts predict.
The combination of high monthly costs and the disappearance of live sports as the unemployment rate has roared to a staggering 14.7 percent level have caused the steep cancellation rate, according to Wall Street research firm MoffettNathanson.
“At 63 percent of occupied households, traditional pay-TV penetration has reached a level not previously seen since roughly 1995,” analyst Craig Moffett said. “There are now as many non-subscribing households as there were pay-TV subscribers in 1988.”
As people dump subscriptions, the growth of cable networks’ affiliate fees also is taking a sharp hit, UBS Securities analyst John Hodulik said.
“We believe the (coronavirus) outbreak could drive modest acceleration in cord-cutting in the lockdown phase but more dramatic declines post-lockdown given the expected recession,” Hodulik reasoned. “The absence of sports should pressure sports nets in the near term as distributors balk at paying high fees.”
The only notable subscriptionTV services to add subscribers in the first quarter of 2020 were Hulu + Live TV, which signed up about 100,000 new people, and Google’s YouTube, which increased users by about 300,000 to reach 2.3 million, Moffett estimates.
Disney+ continues its robust spree, having signed up an astounding 54.5 million customers worldwide as of this week, less than six months after launching the service, CNBC reported earlier.