Cord-cutting accelerated by pandemic, claims report

The global Covid-19 pandemic is accelerating trends in cord-cutting, a new report has said.

According to figures from ABI research, the pay TV market’s decline has been sped up by the health and economic crisis. The research firm estimates that the global market will see a decline to its subscriber base from 2019 to reach 1.07 billion in 2020.

The US, one of the most expensive countries in the world for cable and other pay TV services, lost 2 million subscribers in Q1 2020 alone. This is in part due to rising levels of unemployment in the country but also down to the shutdown of live sports events around the country – a pause which drove many operators to offer discounted packages or suspended subscriptions in an effort to reduce churn.

This is not isolated to the US though. ABI points out that prior to the pandemic, cord-cutting was typically centred in mature markets with high broadband penetration, but the trend has also started to take hold in emerging markets as well.

In India, pay TV operator lost 1.5 million subscribers in H1, with the research film also saying that cable operators could not collect 80% of all subscription fees in the country.

Khin Sandi Lynn, industry analyst at ABI Research, said: “In mature markets, cord-cutting could create an opportunity for streaming services since some cord-cutters may choose video streaming to replace pay-TV service. However, in emerging markets, low broadband penetration could be a barrier for many consumers to move to streaming.”

ABI suggests that pay TV operators should implement price adjustments in order to retain subscribers and slow the trend towards cord-cutting. This could, it said, include repackaging services into smaller channel bundles, increasing promotions, or heavier subsidising of consumer presence equipment (CPE).

The report has a more optimistic outlook going forward though, with subscriber loss likely to be temporary. With sports beginning to resume, sports fans are likely to go back to pay TV services, particularly in emerging markets where broadband penetration is low and there are a limited number of streaming services.

The pay TV market is projected to reach 1.1 billion subscribers globally by 2025.