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Is Big Cable Dead? Cord-Cutting Has Tripled in a Year

By Daniel B. Kline - Mar 10, 2020 at 5:00AM

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Big cable has a big problem.

Americans have begun rejecting traditional cable -- both the wired and satellite versions -- in record numbers. The industry dropped nearly 1.6 million customers in 2018, and more than triple that, 4.9 million, in 2019, according to data from Leichtman Research Group (LRG).

You could argue that the drop is even worse, because 6.7 million of the 86.2 million households counted as cable subscribers get internet-delivered services. Many of these plans are stripped-down options that are much cheaper than traditional cable.

A person points a remote at a television.

Cable's future has become fuzzy. Image source: Getty Images.

How bad is cable's decline?

"Overall, the top pay-TV providers lost 5.4% of subscribers in 2019 compared to a loss of 1.7% in 2018," said LRG President Bruce Leichtman in a press release. "The significant increase in pay-TV net losses in 2019 was both a function of consumers having more video options and the decisions by AT&T (T 1.84%) and other providers to increasingly focus on long-term profitability in acquiring and retaining subscribers."

DirecTV, which is owned by AT&T, accounted for more than half of the overall drop, losing nearly 3.2 million customers. Rival Dish Network (DISH 11.60%) dropped 511,000 customers, about 5% of its total customer base. Dish did, however, add 175,000 people to its Sling Streaming service in 2019, though it dropped almost 100,000 paying customers in the fourth quarter.

Nearly every cable company saw its subscriber count drop in 2019. Comcast lost 732,000 subscribers, while Charter Communications dropped 462,000. Among all cable providers, only the aforementioned Sling TV and Walt Disney's Hulu Live added customers.

To compound the bad news for Comcast, Charter, and other traditional cable players, broadband customer gains did not come close to equaling cable losses. Last year, only 2.5 million new broadband customers were added, roughly half the number who dropped cable (in 2018, overall cable losses were roughly equal to the number of people who added broadband).

Comcast and Charter, however, still covered their losses in overall customers, each adding over 1.4 million broadband customers, well more than what they lost on the pay-TV side.

Cable is dying

Cable has become like the newspaper industry: It's a legacy business that's not attracting new customers, while its legacy base increasingly considers other options.

Young people see no need for cable -- they consume television on their phones or tablets via streaming services or YouTube. Older people, cable's traditional customer base, have increasingly adopted other options that save them money.

This phenomenon will only get worse as more content providers launch streaming services. Once it's possible to get nearly any content without getting a cable subscription, the losses will increase.

It's hard to know where the bottom will be for the industry. Some consumers will still want the convenience of having hundreds of channels all in one place. That number, however, will be well below the 86 million people who currently pay for cable.

Cord-cutting is no longer a manageable phenomenon for the industry. It's a growing problem that's going to get worse and ultimately end in most Americans consuming television in a different way. That's bad news for the biggest players, and maybe a death sentence for DISH and DirecTV.

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Stocks Mentioned

AT&T Inc. Stock Quote
AT&T Inc.
T
$20.99 (1.84%) $0.38
DISH Network Corporation Stock Quote
DISH Network Corporation
DISH
$18.85 (11.60%) $1.96
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$97.78 (3.69%) $3.48
Comcast Corporation Stock Quote
Comcast Corporation
CMCSA
$39.57 (1.18%) $0.46
Charter Communications, Inc. Stock Quote
Charter Communications, Inc.
CHTR
$463.12 (1.76%) $7.99

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