Just in case you thought cord cutting was a fad, a new report from MoffettNathanson shows some striking numbers. For the first quarter of 2017, traditional pay television had its worst week ever, losing over 760,000 subscribers. That means loses from Q1 2017 were five times as large as losses from the same time in 2016, when 141,000 subscribers were lost.
In the “Cord Cutting Monitor” study, Craig Moffett wrote “For the better part of fifteen years, pundits have predicted that cord-cutting was the future. Well, the future has arrived.”
This leaves pay television shrinking at a rate of 2.4%, which may not sound like much, but accounts for the worst rate of decline and highest acceleration in the rate of decline. The number of cord cutting homes and cord-never homes (homes that didn’t have a cable subscription to start with) has risen to over 6.5 million since 2013.
When combining cord cutting’s acceleration and the rise in cord-nevers, almost 1 million homes either eliminated cable or chose not to take it to begin with in the first quarter of 2017.
Moffett notes that things look even more bleak for cable when it’s considered that just over 155,000 new households formed in this time period. 10 years ago, 80 percent of those homes would have taken a cable subscription.
The most important thing is, Moffett says, that the cord cutting’s acceleration isn’t limited by demand, but by supply, as cord cutters now have more options that ever before. Both Charter and Dish have made statements saying aggressive pricing from competitors is causing as high churn rate as customers switch from one service to another. But Moffett doesn’t buy that. “Cutting the cord isn’t just a matter of whether pay TV operators are or aren’t offering promotions,” he said. “Those subscribers have to have somewhere to go.”
“Whatever the cause, it seems naive to suggest that we have seen the worst of the trend. Instead, this is almost certainly just the beginning.”