Pay-TV users tuned out
Losses underscore industry fears that cable model at risk
in droves last quarter as 300,000 dropped service.
NEW YORK — How bad have things been for the pay-television industry lately? An estimated 300,000 Americans dropped TV service last quarter, and analysts are calling it good news.
Predictions for subscribers who canceled video packages — from cable, phone and satellite providers including Comcast and Dish Network — range from 280,000 to 360,000, based on analysts’ estimates. That’s about half as many as in the second quarter, which at over 600,000 set an industry record.
The losses underscored investors’ fears that cordcutting was fraying traditional TV’s business model, contributing to a massive sell-off in media stocks in August.
“While the quarter may not be as strong as the third quarters of 2013 or 2014, it will nonetheless show an improvement,” Evercore ISI analyst Vijay Jayant wrote in a note to clients this month.
The record number over the summer was “not a cord-cutting inflection point,” Jayant said, and was likely due to a series of industry mergers that distracted pay-TV providers from offering promotions to attract more customers.
For years, the number of consumers paying for hundreds of channels has been a key indicator of the health of the TV industry. Subscriber losses not only hurt distributors, but also threaten programmers like Walt Disney and Time Warner that rely on subscriber fees and advertising revenue based on ratings, which have declined this year.
The continued exodus highlights the challenges the sector faces as more consumers opt for cheaper video entertainment from Netflix, Amazon.com or Dish’s own live streaming service, Sling TV.
“The good news is that Q3 sounds better, but we are still looking at heavier losses relative to prior
ESPN job cuts
NEW YORK — Disney’s ESPN is cutting about 300 jobs, or 4 percent of its staff, amid signs that the traditional cable bundle is less far-reaching than it once was.
— Associated Press
year,” Wells Fargo analyst Marci Ryvicker said in a note to clients.
Investors will start getting a clearer picture of the state of the pay-TV industry over the next two weeks when companies report third-quarter results. The video services of phone companies haven’t declined as fast as those of cable companies, and in some quarters, they showed gains.
Verizon and AT&T are predicted to have added subscribers for their TV services last quarter, although fewer than a year earlier.
The cable companies will start reporting next week, led by Comcast, the largest, which may have lost 71,000 TV customers.