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Cable And Satellite Companies Stand to Lose Billions Due to Streaming

Cable TV Dying Streaming
Image: Creative Commons.

The move away from traditional cable and satellite TV and towards streaming services, known as cord-cutting, has been happening gradually over the last few years, while accelerating during the pandemic lockdowns of 2020. Now, a new report indicates just how much money the legacy providers stand to lose.

According to a new forecast from Kagan, the loss of revenue from cord-cutting is expected to reach more than $33 billion in the next four years.

“Video cord cutting is expected to strip nearly $33.6 billion in annual revenue from traditional U.S. multichannel services in the five-year outlook,” the report said. “The impact of the migration of consumers from big subscription services, according to Kagan’s latest forecast for cable, direct broadcast satellite and telco multichannel revenue, is charting a course for sales to dip from $91.1 billion in 2021 to $64.7 billion by 2025.”

And that’s not all the bad news for traditional pay-TV companies.

“Changing viewing patterns, only slightly moderated by rising average revenue per unit, are forecast to depress sales excluding advertising by 45% from the estimated 2016 annual peak of more than $116.9 billion,” the report said. “While all three major platforms are feeling the impact from the shift, the magnitude of the losses are expected to hit more acutely for DBS and telco revenue subtotals amid waning commitments by major players and relative stability from the large cable providers.”

According to the latest quarterly report from Leichtman Research Group, Inc., the pay-TV companies lost about 1.2 million net video subscribers over the course of the second quarter of 2021. While a big number, it was less than the 1.5 million subscribers lost in the second quarter of 2020, which was the height of the coronavirus shutdowns.

That left the firms with a total of 77.6 million remaining subscribers, of which 42.6 million are  for cable companies, 28.2 million are “other” (satellite and telco) and  6.8 million are the vMVPD category. Cable companies lost 590,000 subscribers of the 1.2 million in the second quarter, satellite/telco lost 700,000, and the vMVPDs gained 55,000 subscribers.

“Pay-TV net losses of 1,230,000 in 2Q 2021 were about 275,000 fewer than in 2Q 2020 on a pro forma basis,” Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc., said in the release of the numbers back in August.  “Over the past year, top Pay-TV providers had a net loss of about 4,520,000 subscribers, compared to a loss of about 5,460,000 over the prior year.”

We’ll get a better picture of the companies’ performance later this month, as they announce quarterly earnings. Comcast is set to announce theirs on October 28.

 Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Written By

Stephen Silver is a journalist, essayist, and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review, and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

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