Kagan On Cable: A Record Q1 Cord Cut, Fueled By COVID-19


So much for that belief that TV hungry sheltered-at-home Americans would at least, temporarily, stem the cessation of MVPD services.

“Cord cutting” in the U.S. was fast and furious in Q1 — so much so that multichannel subscriptions experienced their largest-ever first quarter decline. That’s according to fresh data from Kagan, which notes, “At 2 million, it was both the biggest absolute and relative quarterly drop to-date.”

Fresh data from the  media research group within S&P Global Market Intelligence estimates it also was the first quarterly decline for virtual multichannel alternatives, such as Dish’s SlingTV and AT&T TV NOW.

As determined by Kagan, broadband-delivered services collectively lost 261,000 subs, a 2.8% decline, to finish the quarter with 9.2 million subs.

Gains from Hulu with Live TV and YouTube TV were erased by the declines from Sling TV and AT&T TV Now — as well as Sony’s decision to shutter PlayStation Vue in January.

It matches other research studies that paint a bleak picture for MVPDs, with the COVID-19 pandemic only serving as lighter fluid on an industry that’s been aflame in lost customers for months. Indeed, the rough start to 2020 underpins Kagan’s updated forecast for video market share in the U.S. The revised outlook found that mounting unemployment and the COVID-19 economic downturn only added to the already pervasive cord cutting forces. “This fueled revised expectations for online-only households to surpass combined traditional and virtual multichannel subscribers in the projections,” Kagan says.

Subscriptions to traditional cable, direct broadcast satellite (DBS) and telecommunications (telco) video services dropped 2.4% in the quarter, Kagan notes.

Kagan’s updated U.S. Video Forecast also finds that the interruption in programming and ensuing economic turmoil is expected to bring an 11% drop in traditional multichannel subscriptions in 2020 and penetration of less than 56% by the end of the year.

Additionally, virtual services have narrowed their cord cutter appeal and are expected to account for less than 10% of occupied households to reach nearly 11 million by year-end 2020, Kagan finds.

Lastly, Kagan concludes that the upward momentum of online-only households satisfying entertainment needs solely through a combination of free and subscription streaming services is expected to accelerate to 24.7 million by the end of 2020 — accounting for more than 19% of occupied households.