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Cord-Cutting Revs Slower, But Pay TV Still Heads South

With earnings season just about over, the television business is trying to make sense of the latest figures on the effect cord-cutting is having on the traditional pay-TV industry.

According to top cable analyst Craig Moffett, the third-quarter figures, which show that the decline in pay-TV households rose to 0.8% from 0.7% in the second quarter, are just anticlimactic. It’s not the dive seen in the second quarter that sent the industry and the stock market into a panic. But it is still worse.

“The press has tied itself in knots explaining what has already largely been known for at least the past week or so; the pace of pay TV subscriber erosion accelerated in Q3, but the rate of acceleration slowed sharply,” Moffett said in a report Monday. “Whether that fits the narrative of cord-cutting getting better or cord-cutting getting worse depends largely on one’s going-in expectation.”

Moffett notes that new household formation was weak in the third quarter. “This lack of a tailwind from household formation suggests that the rate of cord-cutting and/or cord-nevering in the quarter may actually have slowed,” he said.

What was clear is that things are getting better for cable while they get worse for other video distributors. The fast-growing telco sector has seen the rate at which it’s adding subscribers slow to 2.2% from 11.1% a year ago. Satellite is shrinking at a 0.9% rate, faster than the sector as a whole.

Meanwhile cable reduced its losses to 1.4% in the third quarter from 2% in the second quarter and 3.2% two years ago. “For the second-straight quarter, cable has taken back share from its competitors,” Moffett notes. “That’s an incredible story.”

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.