‘Only’ 400K Will Cut the Cable in 2014, Says Analyst
Only in the mind of a pay TV executive and industry analyst could the anticipated loss of “only” 400,000 subscribers be considered a victory. Why? Because those 400,000 cord cutters are complemented by hundreds of thousands of “cable nevers” (ie those that never had and never could cut the cable).
Pay TV just doesn’t seem to understand, when it comes to selfie obsessed millennials (above), cable and satellite just aren’t in the picture.
Media analyst Craig Moffett says in a just released report (pdf) that the number of people who will cut the cable this year has “slowed to a crawl.” While he’s pretty sanguine about growing pay TV revenue and profits in the face of a declining customers base, Fairer Platform sees danger, danger, danger!
“Cord cutting trends in Q2 remained surprisingly benign,” Moffett wrote. “Over the past year, the number of pay-TV subscriptions in the US has barely budged. That may not sound like a reason for celebration, but it is a small but discernible improvement from recent trends when the number of pay TV subscribers was actually shrinking (albeit slowly).”
According to the Moffett’s Q2 tally, US pay-TV services lost 305,000 video subscribers versus 387,000 in the same quarter last year. Traditionally, the second quarter is pay TV’s worst for the year.
That said, cable providers lost 517,000 subs in Q2 ’14 versus 598,000 in the year-ago quarter, while their satellite compatriots shed 78,000 subs compared to 168,000 last year — remember the year is only half over and Q2 is traditionally pay TV’s worst quarter.
“And here is an interesting, and perhaps surprising factoid,” added Moffett. “The ‘dying dinosaur’ pay-TV industry is growing revenue more than twice as fast as the wireless industry (after adjusting for accounting distortions in wireless).”
Cut the Cable Nevers
The last four years have seen more than 10 million subscribers or about 2.5 million annually cut the cable. Judged by that yardstick, perhaps 400,000 cord cutters in 2014 won’t be a big number after all.
Nevertheless, pay TV is living dangerously, dabbling in dangerous voodoo — increasing revenues coming from a declining customer base. Moreover, the declining customer base includes very, very few young adults…
Dangerous voodoo, indeed. What’s your take?