Cord-cutting is expected to get worse in 2021 and 2022, offset somewhat by growth of virtual multichannel video programming distributors, according to Broadcasting+Cable citing a new report from S&P Global.
S&P said legacy MVPDs--cable, satellite and telco--will lose 8.2% of their subscribers in 2020 after losing 7.9% in 2019. In 2022, another 10.3% of subscribers are expected to cut the cord.
The pay TV losses are offset somewhat by growth among streaming distributors such as Hulu Live and YouTube TV. S&P estimates those vMVPDs will grow by 15.7% in 2021 and 12.3% in 2022.
That will leave the overall pay TV universe down 4.5% for 2020 and 6% for 2021.
“This increased pace should continue for the cable industry because the sector is increasingly indifferent as to whether unprofitable customers get their video service from cable companies or a third-party service,” the report said.
S&P notes that Charter Communication bucked the trend by increasing subscribers in 2020, but will lose about 4% of its TV customers in 2021. “Longer term, we expect Charter to use ‘skinny bundle’ options to keep its video subscriber losses lowest in the industry,” the report said.
Long-term, S&P said that the vMVPDs won’t stop the decline in pay TV.
While there was much fanfare when these low-priced, slimmed-down alternatives were launched, these services now resemble a traditional full-size pay-TV bundle and the rapid price escalation (eliminating much of the price difference) has quickly reduced the competitive advantage of these alternatives,” the report said.
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