Comcast, Verizon and Charter are convincing investors that their core business far outweighs cord-cutting concerns, but satellite services aren't so lucky
When Bernstein analyst Peter Supino on Oct. 15 launched coverage of the telecom, cable and satellite industries with a 79-page report, he wrote that "video's outlook is dark." The number of U.S. households that carry the traditional TV bundle has dropped from 101 million in 2014 to just 87 million in 2019, headed for 78 million by 2022.
"The impact of the direct-to-consumer services hasn't been felt yet, but the real sea change is that the cable operators no longer feel compelled to defend the status quo," MoffettNathanson analyst Craig Moffett says. "They're quite comfortable losing low-value video subscribers, and they now know that investors are comfortable seeing video subscriber losses as well."
"Video is still an important profitable component … but we continue to be disciplined and are not chasing unprofitable subs." Comcast Cable CEO David Watson added: "If we can't profitably serve this segment, then we're going to move them to a broadband-only relationship." And not all providers are created equal, hence Supino is bearish on satellite, figuring that shares of DirecTV parent AT&T are headed for a 3 percent fall in the next 12 months while Dish Network stock loses 13 percent, as the silver lining of increased internet access making up for declines in television doesn't apply to the satellite services.
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