Broadband Cable Subs Soared in Q2 on Stay-at-Home Orders: PRG

Net new broadband subscriptions “blew away” expectations, with stay-at-home orders resulting in the best June quarter results in 15 years, Pivotal Research Group's Jeff Wlodarczak wrote investors Friday. Subs jumped 350% year on year, all from cable, to 1.45 million, with broadband occupied household penetration finishing June at 83.7%. Despite stay-at-home effects, telco net data subscriber losses widened by 30% to 200,000, said PRG. Some 20 million copper-based telco subs are “ripe for cable to steal,” with 35%-50% increases in normalized data usage and data-only homes consuming more than 400 gigabytes of data monthly. Wlodarczak sees “plenty of ability for cable to take price as they move to 10+gig bi-directional capital efficiently which will only benefit from bundling with relatively cheap wireless services.” Pay TV delivered another “ugly” result, losing an estimated 2 million subscribers, said the analyst. The 10% drop was better than forecast and an improvement from the record 2.4 million losses in Q1, likely due to the shutdown and government stimulus payments, he said. VMVPDs shed 1.6 million subscribers, flat with Q2 2019. That pricing model gives consumers “fewer channels at roughly the same price without the quality of service,” said Wlodarczak. Dish Network bled 340,000 subs when it tried to normalize prices, and Google will likely face losses after its 30% hike to $65 for YouTube TV, he said. Cable had a 10% uptick in subscriber losses to 860,000, better than Pivotal’s forecast of minus 1.2 million. Satellite TV lost 900,000; telcos lost 190,000. Wlodarczak attributed accelerating overall pay-TV losses to the increasingly high cost of traditional pay TV, increased commercial loads, “cheap entertainment alternatives,” password sharing and lack of live sports.