Pay-TV Exodus to Hit 7% in 2021: S&P

TV’s “steadily increasing prices for less expensive streaming video options.” The cable industry’s indifference is increasing on “whether unprofitable customers get their video service from cable companies or a third-party service,” said the report. Though cord cutting’s impact and fewer pay-TV cable bundles are “negative for the U.S. television sector’s credit quality,” the effect on ratings in the cable sector will be "muted” due to the strength of providers’ broadband service, S&P said. Satellite pay-TV subscribers will drop by double digits, said the report. Though Dish Network’s focus on key rural subscribers slowed its losses, the sustainability of that trend is “uncertain,” said the report. Dish may “struggle to continue passing along rate increases as life normalizes and demand for in-home entertainment subsides,” it said. Churn could increase in 2021 as vaccination rates increase and consumers become more comfortable letting technicians into their homes to switch providers or move, it said. S&P cited bipartisan government support to increase broadband availability, which would “shrink the addressable market significantly” over several years. S&P sees DirecTV's subscriber retention “woes” continuing this year. It had expected such losses to moderate last year as the company cycled through circa-2017 subscribers on deeply discounted plans. That didn’t occur: The pace of subscriber defections remained at about 15%, it said. DirecTV's subscribers skew to urban and suburban markets, where they have access to broadband and streaming alternatives. Dish and NCTA declined to comment Monday. DirecTV owner AT&T didn't comment.