Cord Cutting Accelerates

AT&T's Video subscription results put a fork in the eye of the naysayers out there who claim cord cutting is not a meaningful trend. Today it was announced that AT&T lost 390,000 traditional pay television customers for satellite and U-verse in the most recent quarter. DIRECTV NOW, AT&T's answer to cord cutting enjoyed 300k customer additions.

MoffettNathanson analyst Craig Moffett said “The issue is in the acceleration in cord-cutting, and the prevalence of OTT, not each other,” Moffett wrote. He added that we should expect to see losses across the pay TV industry due to the influences of cord cutting.

Can we not all agree that cord cutting is a meaningful trend in the marketplace?

Comcast and Disney have had poor results this year and blamed it on competition and other factors instead of acknowledging the likely cause, cord cutting. Why else would ESPN / Disney decide to go direct to consumer with their own offering next year unless they see the writing on the wall? Customers want to lower their cable and satellite bills.

The Satellite business is rapidly slowing down. I have seen this first hand having been involved in the satellite business with DIRECTV and Dish for the past 13 years. The sales traffic and call volume just is not the same. Don't get me wrong they both still have a great product but customers just aren't willing to pay $100+ per month for pay tv any more. Customers are tired of Box Fees.

Let's face it, the way people consume video has changed. TV Everywhere by the major cable and satellite providers has helped drive this change. As customers watch a show on their iPhone or tablet via TV Everywhere and then realize they could watch the same content from a streaming provider for much less and the inevitable cross over begins to occur.

When Comcast Xfinity begins offering Instant TV streaming packages from $10-30 to fight cord cutting, its difficult to deny everyone in the pay tv space has finally come to the realization that streaming is the television of tomorrow.

Cable and Satellite companies have realized their cash cows are dying faster than they expected. Cord Cutting is only going to become more and more commonplace.