Cord cutting could claim another 6.2M video subs in 2020, analyst says

Finance earnings stock ticker graph
UBS predicts that AT&T will lose another 2.6 million subscribers in 2020, down 13% from 2019 when the company is expected to account for approximately two-thirds of all U.S. video subscriber losses. (Getty/monsitj)

Cord cutting and pay TV subscriber losses greatly accelerated in 2019 – thanks largely to rapid erosion of AT&T’s base – and that trend is expected to continue in 2020.

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.

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceVideo!

The Video industry is an ever-changing world where big ideas come along daily. Cable, Media and Entertainment, Telco, and Tech companies rely on FierceVideo for the latest news, trends, and analysis on video creation and distribution, OTT delivery technologies, content licensing, and advertising strategies. Sign up today to get news and updates delivered to your inbox and read on the go.

RELATED: Cord cutting even worse than ‘freaking ugly’ in Q3

That doesn’t mean that AT&T is out of the woods just yet with video subscriber declines. UBS predicts that the company will lose another 2.6 million subscribers in 2020, down 13% from 2019 when the company is expected to account for approximately two-thirds of all U.S. video subscriber losses.

In the meantime, cable providers’ continued focus on internet and not video as their key product could lead to accelerated video subscriber losses in 2020.

“Charter's recent price increase and the likely adoption of the Flex/Peacock bundle by the industry are signs that video sub losses have fallen down the list of concerns with cable mgmt,” wrote Hodulik. “We now expect the cable industry to lose 2.8M subs in 2020, up from 2.1M in 2019, offsetting much of the benefit of fewer losses at AT&T.”

UBS also expects virtual MVPD growth to slow down in 2020, particularly as PlayStation Vue prepares to shut down in January and AT&T TV Now appears to be winding down. The firm said it has seen fewer promotions at the large vMVPDs and that Disney guidance for improving Hulu losses make them unlikely. UBS believes Hulu with Live TV and YouTube TV have been adding around 100,000 to 200,000 subscribers per quarter and expects that trend to continue while smaller providers struggle with financing.

Suggested Articles

When PlayStation Vue goes dark on Jan. 30, 2020, it will leave PlayStation owners without an option for streaming live TV on their game consoles.

AT&T is including the 2019-2020 season of NBA League Pass Premium for customers who switch from their TV provider to AT&T TV.

Tubi, a free, ad-supported video on demand service, is now available to stream on Amazon Echo Show devices.