Oct 27, 2020 - Economy

Pay-TV's death spiral

Data: eMarketer; Chart: Axios Visuals
Data: eMarketer; Chart: Axios Visuals

The pandemic will drive cable and satellite TV providers to lose the most subscribers ever, according to the most recent data from eMarketer.

Driving the news: Entertainment giants are beginning to pivot from linear TV t0 streaming, but with that pivot comes messy math.

  • Cord-cutting: At least 3 large media firms expect to lose 50 million traditional TV subscribers in the next five years. per CNBC. AT&T and Verizon both reported sluggish earnings around their media businesses last quarter.
  • Long-tail channels: Networks have discussed further cutting long-tail cable channels that are weighing down bundle negotiations. Some of the "long-tail" channels being floated in reports are household names, like E! and Oxygen.
  • Regional sports: Regional sports networks are struggling to reach distribution deals as the pandemic eats at live sports. Creditors are eyeing a possible debt restructuring of Sinclair's regional sports unit.

What's next: The simultaneous pivot will force even more competition onto the already saturated streaming landscape. Netflix shares tumbled last week after missing modest Q3 subscriber forecasts.

  • HBO Max was able to double what it calls "activations" to its service last quarter, but activations are sign-ups to its service from people already paying for the app via their cable subscription.
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