Approximately 1.8 million American households cancelled subscriptions during the first quarter of 2020, Variety reports.
As Americans disconnect, TV providers are feeling the pain.
With the COVID-19 pandemic sweeping through the country during the winter months, cable and satellite-TV companies experienced a steady thaw of paying customers.
More alarming for cable companies is that the second quarter – with most of the country in lockdown mode – could cause even more haemorrhaging, analysts predict.
The combination of high monthly costs and the disappearance of live sports as unemployment rates roar to a staggering 15 per cent level have caused the steep cancellation rate, according to Wall Street research firm MoffettNathanson.
“At 63 per cent of occupied households, traditional pay-TV penetration has reached a level not previously seen since roughly 1995.
“There are now as many nonsubscribing households as there were pay-TV subscribers in 1988,” explained analyst Craig Moffett.
As people dump subscriptions, the growth of cable networks’ affiliate fees is also taking a sharp hit, said UBS Securities analyst John Hodulik.
“We believe the (coronavirus) outbreak could drive modest acceleration in cord-cutting in the lockdown phase but more dramatic declines post-lockdown given the expected recession,” reasoned Hodulik. “The absence of sports should pressure sports nets in the near term as distributors baulk at paying high fees.”
The only notable subscription-TV services to add subscribers in the first quarter of 2020 were Hulu + Live TV, which signed up about 100,000 new people, and Google’s YouTube, which increased users by approximately 300,000 to reach 2.3 million, Moffett estimates.
Disney+ continues its robust spree, having signed up an astounding 54.5 million customers worldwide as of this week, less than six months after launching the service, reported CNBC earlier.