August 13, 2016 by Paul Dughi
There’s no denying this cord-cutting thing is real.
BTIG Research is the research arm of BTIG brokerage and fund services company which advises investors on key markets. They looked at the top MVPDs – that’s industry jargon for “multi-channel video programming distributor. In other words, what people know as cable or satellite TV companies.
BTIG’s research shows that the top 8 MVPDs lost 705,000 subscribers over the past year. That compares to just 59,000 subscribers lost in the previous four quarters.
Besides people cutting the cord, there’s what’s known as “cord-shaving.” That’s where people downgrade their service or adopt smaller bundles of programming.
High costs coupled with diverse offerings from local stations – which know typically program 2-3 channels each (instead of 1) – and the growth of streaming devices such as Roku, FireTV, and Apple TV – have led to cord cutting and cord shaving.
$80-plus per month… with inflexible packaging and a dizzying number of add-ons and surcharges is driving consumers to seek less costly alternatives. Increased cord-cutting and cord-shaving ties directly to our view that antenna households utilizing streaming devices are increasing rapidly. – BTIG 2016
So what is the outlook from BTIG?
We continue to believe MVPD subscribers are unlikely to collapse in the near-future, however, we see no reason why subscriber trends will not continue to worsen. Just a few years ago, the industry was adding video subs at a 1-2% rate, now the industry is losing 2% through cutting/shaving, not to mention the growing pressure from cord-nevers. – BTIG 2016