Pay TV took a beating in the first quarter. Will it rebound when the lockdown ends? ViacomCBS continues its move toward independence from pay TV. We discuss how its free and premium services are helping each other out.
Chapter 1: Pay TV subscribers plummet in Q1 2020 (1:20)
Leichtman Research says that traditional pay TV providers lost 2.1 million video subscribers in Q1. The loss is almost double the number in Q1 2019. Satellite operators bore the brunt of the losses, with DirecTV and Dish losing 1 million. However, cable lost 600,000 and telcoTV 123,000. I found the results surprising because people normally hold on to their entertainment services during times of stress.
Chapter 2: Why so many people are leaving pay TV (5:00)
Will enumerates several issues that are coming together to accelerate the cord-cutting trend> some of them are long-term issues, like price rises, and shorter-term, like falling incomes. He thinks that AT&T was particularly affected by the decline.
Chapter 3: vMVPDs also had weak performance in Q1 (8:50)
I expected vMVPDs to be somewhere cord-cutters might turn. However, that did not seem to happen. For example, Sling TV lost 280,000 subscribers. Will thinks the original value proposition has been eroded, and that further erosion is probable. I think vMVPDs could bounce back a little when sports get going again.
Chapter 4: ViacomCBS strikes an independent pose (15:00)
ViacomCBS continues to enhance its position in the direct-to-consumer market. The company is starting to leverage its free ad-supported service Pluto TV more. It is beefing up CBS All Access with more content. It is also using each service to boost the other.
We both think that ViacomCBS is better positioned than ABC, FOX, and NBC. Even when NBCU releases Peacock for general availability in July, it still will not be as strong an offering as All Access.