U.S. cord-cutting steepened in 2020 for traditional pay TV services -- down 7.3%, losing 6 million subscribers -- to 76.8 million homes, according to MoffettNathanson Research.
In 2019, the average loss was 5.8%.
Cable TV subscribers were down 4.3% in 2020 (to 47.0 million); satellite TV subscribers, losing 13% (to 21.9 million); and telco subscribers off 7.3% (to 7.8 million).
Although virtual pay TV providers grew by 20% in 2020 to 11.99 million, the overall U.S. pay TV market -- virtual and traditional -- sank 4.4% to 88.8 million.
Two of the biggest cable TV operators -- Comcast and Charter Communications -- went in opposite directions.
For the year, Comcast subscribers was down 6.6%; Charter -- going against all trends -- was up 0.3%. (Charter doesn’t expect this positive growth to continue.)
Virtual pay TV services keep growing, but they continue to inch up on monthly pricing. For example, Hulu and YouTube pricing is now 86% higher they when they launched two years ago -- both at $65 per month.
Craig Moffett, senior research analyst of MoffettNathanson, expects the trend for consumers to leave traditional pay TV viewers going to subscription video on demand service -- causing a irreparable cycle.
When this happens, it forces sports programmers to raise affiliate fees to pay TV services, which in turn, forces pay TV business to pass along even higher prices to consumers. And that “further erodes the value proposition for non-sports viewers.”
At the same time, rising cord-cutting trends forces big media to move their top programming to direct-to-consumer platforms, which leave traditional TV networks with less quality fare.
“The market is placing bets on a completely different future where SVOD and AVOD are the core businesses, not side shows or pet growth projects,” says Moffett.
He adds: “That future portends a reordering of the value chain. It may not hold a place for cable networks. And without cable networks, there won’t be vMVPDs. Predictably, we’re more than a little skeptical that everyone here will win.”