(NY DAILY NEWS) – Americans are cutting the cord and TV providers are feeling the pain.
As the COVID-19 pandemic swept through the country during the winter months, cable and satellite-TV companies experienced a steady thaw of paying customers.
Approximately 1.8 million American households canceled subscriptions during the first quarter of 2020, Variety reported on Friday.
More alarming for cable companies is that the second quarter — with most of the country in lockdown mode — could cause even more hemorrhaging, analysts predict.
The combination of high monthly costs and the disappearance of live sports as unemployment rates roar to a staggering 15% level have caused the steep cancellation rate, according to Wall Street research firm MoffettNathanson.
“At 63% of occupied households, traditional pay TV penetration has reached a level not previously seen since roughly 1995,” explained analyst Craig Moffett. “There are now as many nonsubscribing households as there were pay-TV subscribers in 1988.”
As people dump subscriptions, the growth of cable networks’ affiliate fees is also taking a sharp hit, said UBS Securities analyst John Hodulik.
“We believe the (coronavirus) outbreak could drive modest acceleration in cord-cutting in the lockdown phase but more dramatic declines post-lockdown given the expected recession,” reasoned Hodulik. “The absence of sports should pressure sports nets in the near term as distributors balk at paying high fees.”
The only notable subscription-TV services to add subscribers in the first quarter of 2020 were Hulu + Live TV, which signed up about 100,000 new people, and Google’s YouTube, which increased users by approximately 300,000 to reach 2.3 million, Moffett estimates.