Report: Cord-Cutting To Worsen

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.

S&P’s report said the cable subscriber losses come primarily from the larger cable operators. 

“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.