The research company MoffettNathanson predicts that the number of households subscribing to a traditional multi-channel service (cable or satellite) will fall from about 91 million to around 87.5 million in 2018. It is a loss of about 3.8 percent. By the end of 2019, the firm estimates that the number will be about 84.3 million – a 3.6 percent decline. In other words, it is very much the same.
No doubt, the bottom is falling off from under the satellite TV business. AT & T reported huge losses to DirecTV on Wednesday morning, with 403,000 subscribers canceling the traditional satellite service and another 267,000 users arriving at DirecTV Now, a streaming service company that imitates a pay-TV package. (A quick reminder that in 2015, AT & T paid $ 50 billion for DirecTV – an asset that is now bleeding customers in every way you can imagine. This procurement continues to look worse.)
Antenna figures will not be beautiful. More than 360,000 satellite TV subscribers fled in the third quarter, and the Sling TV with added power added just 26,000. Given DirecTV's numbers, that would be shock if Dash did not announce another huge loss in the fourth quarter.
But customers do not run away from cable television with the same rate. Just look at Comcast and the Charter – the two biggest U.S. cable providers. In the third quarter, the charter announced a loss of 66,000 users – less than 104,000 that it lost in the third quarter of 2017. Comcast lost 29,000 residential video subscribers in the fourth quarter, again losing less than 33,000 in the fourth quarter of 2018.
Overall video losses for both companies in 2018 compared to 2017 – no surprise. No one claims that the package is eroded. Obviously, Netflix, Amazon, YouTube and other streaming services continue to take a stake. But is there anything special for 2019 that will make the losses fall from rock as Cook points?
The biggest new streaming options are unlikely to be fully utilized by 2020. As we announced in October, Apple is preparing to give original content free for users of devices as part of the service to be released later this year. AT & T's Warner Media announced that its streaming services come later this year. Disney is set to debut its streaming service, Disney +, at the end of 2019. NBC Universal is working on a streaming service that will hit the first quarter of 2020.
The price of the included OTT services that compete directly with cable packages is increasing, making them less attractive alternatives to the triple play package from Comcast and the Charter, where the price of the video is subsidized by the purchase of broadband. Hulu only raised the price of a live television service from $ 5 a month. The losses of DirecTV's subscribers are now the result of AT & T's promotional prices. Cable companies continue to mix with more personalized packages and better mobile applications to keep subscribers in the house.
Another potential catalyst for real acceleration in cable cable defects would be if 5G mobile broadband could be sufficient as an alternative to cable broadband. But most experts, including Craig Moffett at MoffettNathanson, do not expect the 5G much of a competitor for cable internet in 2019 (or even years later).