May estimates showed that cable sports networks are taking a huge hit in subscribers. But despite that, it appears that cord cutting has slowed. That’s according to the latest estimates from an industry analyst.
Craig Moffett of MoffetNathanson says the rate of cord cutting held flat at 3.4 percent in the first quarter of 2018 as compared to the 3.4 percent rate in the fourth quarter of last year. And when streaming services are factored in, the overall rate of cord cutting was 0.5 percent, the lowest rate of cord cutting since the fourth quarter of 2015.
So it appears that the gaining popularity of streaming services like DirecTV Now, Sony Playstation Vue, Sling, and YouTube TV are beginning to offset any losses by cable and satellite providers. Cord cutters are seeing that as an alternative rather than having nothing at all. And that’s a good sign for the pay TV industry.
Moffett says that while not every network is on a streaming service, the future looks bright for the skinny bundles now as compared to previous years:
“…it’s a whole lot easier to face a future where 70% or 80% of all cord cutters are still paying for a streaming video bundle, even if its a skinny one, than to face a future where, say, more than half of all cord cutters are lost entirely to the ecosystem.”
In their first quarter earnings calls, AT&T and Dish Network told investors that their new features such as cloud DVR plus in-program advertising will add new revenue to their bottom lines for DirecTV Now and Sling, respectively. AT&T says DirecTV Now added subscribers to its pay TV base, offsetting losses from their DirecTV and U-Verse services.
So there’s some encouraging news for the pay TV industry as streaming services start to take hold and offset losses experienced from cord cutters. One good quarter does not a trend make for pay TV, but it does give it some optimism for the future.
