Charter CEO Tom Rutledge acknowledged the struggles of the traditional pay TV bundle, but predicted that the cord cutting trend would slow down soon.
Speaking with CNBC, Rutledge said high prices and password sharing has damaged the U.S. pay TV industry, but he said that the college and second-home markets for pay TV are mostly gone. He said there’s still a viable market for pay TV in place that will hold steady for all providers.
“I think in aggregate they’re going to slow down,” said Rutledge. “Because I think most single-family homes have big TVs in them and that’s where you get sports, that’s where you get news, that’s where you get live TV like this. It’s still going to be under price pressure. I’m not saying the category isn’t under pressure. But I think the rate of decline will slow.”
Charter’s video subscriber losses have been relatively manageable compared with AT&T’s DirecTV satellite business. During the third quarter, Charter posted a net loss of 75,000 video subscribers, as 77,000 lost residential subscribers were offset only somewhat by 2,000 new small and medium business video subscribers.
In contrast, AT&T lost nearly 1.36 million video subscribers – 1.16 million premium video subscribers (DirecTV and U-verse) and another 195,000 AT&T TV subscribers – during the third quarter.
As AT&T continues to burn off promotional pricing subscribers, it’s expected the company’s video subscriber losses will taper off somewhat in 2020. But not every industry analyst believes that will result in better overall results for the pay TV industry.
UBS predicted that the U.S. pay TV industry will lose another 6.2 million video subscribers in 2020, down slightly from the 6.4 million the analyst firm predicts will be lost in total this year. If that loss comes to bear it will represent a 6.7% rate of decline, ahead of 6.2% in 2019 and well ahead of 1.2% in 2018 when video subscriber losses totaled 1.2 million.
“We now expect industry losses to remain in the 6-7% per year range for the medium term, suggesting worsening trends in domestic core affiliate into next year,” wrote UBS analyst John Hodulik in a research report. He said that improvement at AT&T will likely be offset by worsening trends for cable providers and other MVPDs.