US cord-cutting at tipping point with two-fifths of pay-TV ‘at risk’ | Media Analysis | Business
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A research note from analyst Moffett Nathanson has painted a picture of the US pay-TV arena in a state of ‘full disruption’ with traditional suppliers bleeding customers leading to a situation where traditional subscribers are projected to be in the minority.
slingTV 13Aug2019
Moffett Nathanson sees what it calls a bifurcated marketplace where many subscribers are still happy with their pay-TV bundle while there are many who are much more price-oriented. Yet the analyst also noted that US cable companies were embarking on a strategy of focussing on high-value subscribers and moving away for those not diving their profits. To that end the companies are offering OTT and skinny bundles.

However, it is unclear whether this strategy will simply result in more customer finding it easier to go to over-the-top services. Moffett Nathanson believes that it is something that could add further pressure to the pay-TV ecosystem in 2020 and keep elevated the rate of cord-cutting.

Making an estimate of likely scenarios, Moffett Nathanson believes that regular sports and news viewers represent about 85% of the current pay-TV subscriber base, noting that the former cohort are the most entrenched pay-subscribers. This eds to an assumption that the 60% of subscribers who regularly watch sports representing the potential floor for the pay-TV ecosystem – if major sports league rights remain exclusive to pay-TV bundles. Logic follows that 40% of the current pay-TV universe is what the analyst said was ‘under risk’.

Looking at the prospects of the virtual MVPD, ‘skinny’ bundles, the analyst noted that after a number of price hikes and negative subscriber trends, AT&T Now was likely to be a casualty and could be followed by the Sling equivalent. This would make fuboTV the third major virtual MVPD with YouTube TV and Hulu +Live TV.