COVID-19 Driving Cord-Cutting — at Online TV

When Dish Network launched Sling TV in 2015, it represented pay-TV’s answer to the pricey cable bundle and Netflix. Competitors such as Sony PlayStation Vue, Hulu with Live TV, DirecTV Now quickly joined the party. But the industry shine seems to be fading.

Speculation U.S. consumers quarantined in their homes would temporarily stem pay-TV cord cutting was dispelled with the industry’s largest first-quarter decline for traditional multichannel subscriptions. At two million, it was the largest quarterly drop to date.

New data from media research group Kagan estimates it was also the first quarterly decline for virtual multichannel alternatives. The broadband-delivered services collectively lost 261,000 subs or 2.8% to finish the quarter with 9.2 million subs.

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Gains from Hulu with Live TV and YouTube TV were erased by the declines from Sling TV and AT&T TV Now (formerly DirecTV Now) as well as Sony’s decision to shutter PlayStation Vue in January.

By comparison, subscriptions to traditional cable, direct broadcast satellite and telecommunications video services dropped 2.4% in the quarter.

As a result, Kagan updated its forecast for video market share in the U.S. due to mounting unemployment and the COVID-19 economic downturn. The revised projections suggest broadband-only households to surpass combined traditional and virtual multichannel subscribers. Indeed, online TV services have narrowed their cord cutter appeal and are expected to account for less than 10% of occupied households and reach nearly 11 million by the end of the year.

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Meanwhile, broadband homes are increasingly satisfying home entertainment needs through a combination of free and subscription-based streaming services, including adding 24.7 million subs by the end of 2020, accounting for more than 19% of occupied households.

“Home isolation should have stemmed multichannel defections, but the cruel irony of the interruption in programming and ensuing economic turmoil is expected to blunt the benefits,” Kagan wrote in a note. “We forecast an 11% drop in traditional multichannel subscriptions in 2020, and penetrations of less than 56% at the end of the year.”

Xfinity Flex Surpasses 1 Million Devices Deployed

Comcast May 14 announced it has deployed more than 1 million Xfinity Flex devices since the unit’s launch last year. Included with Xfinity Internet (broadband) for free, the device leverages Xfinity X1 technology to deliver video to high-speed Internet-only (non-pay-TV) subscribers.

Dana Strong, president, Xfinity consumer services, said the platform combines access to 200 third-party streaming services such as Peacock, Hulu, CBS All Access, Radio.com and Black News Channel. These services join Netflix, Amazon Prime Video, Amazon Music, HBO Now, YouTube, Epix, Starz and Pandora. Flex also affords subs access to AVOD services such as NBCUniversal’s Xumo, Tubi and Pluto TV.

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“Flex was designed to fit seamlessly into the lives of our Internet-only customers,” Strong said.

Last month, NBCU previewed Peacock to Flex subs. Peacock Premium is now available to Xfinity X1 and Flex customers at no extra cost. The service offers over 15,000 hours of shows and movies, and Flex customers can simply say “Peacock” into their voice remote to explore iconic shows and movies, NBC favorites, plus trending news and pop culture updated daily.

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