Cord-Cutting Hit Record Levels in First Quarter

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Traditional pay TV subscriptions fell by a record-setting 1.8 million in the first quarter, according to an analysis by Craig Moffett of MoffettNathanson Research.

The 7.6% decline includes a 14.3% plunge for satellite, compared to a 4% drop for cable.

"With sports off the air, and with the pain of the tsunami of unemployment just beginning to hit as the quarter ended, all these numbers will get worse in Q2,” Moffett said.

But Moffett noted that even more depressing than the drop in traditional pay-TV subs was a surprising decline in subscribers to streaming virtual MVPDs like AT&T Now and Sling TV. Moffett said vMVPDs lost 341,000 subscribers in the first quarter.

“The vMVPDs, once viewed as the last line of defense for cable networks, imploded in Q1,” he said.

Moffett said that when Sony’s PlayStation Vue service closed in January, its subscribers appear to have gone nowhere. AT&T Now, Sling TV and fubo all lost subscribers.

The Walt Disney Co.’s Hulu Live TV vMVPD grew by just 100,000 subscribers. The category also includes YouTube TV, which this week agreed to add 14 more ViacomCBS networks.

Total pay-TV subscribers, including both traditional and vMVPDs, are shrinking at a rate of 5.3% per year, Moffett said.

“It is perhaps some comfort that some of the same companies losing distribution for their traditional cable networks – we’re looking at you, Disney and Comcast – have launched direct-to-consumer 'lifeboats' that are rapidly gaining traction with distraction-starved, shut-in consumers,” Moffett said. “AT&T will join this club in a few weeks with the launch of HBO Max. But it is increasingly clear that as consumers climb into these lifeboats, they are leaving the (sinking) motherships behind.”

Jon Lafayette

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.