Top Cable TV Execs Talk Recession Fears Amid Pay Subscriber Declines
As media industry watchers debate the impact of a possible recession, top cable TV execs discussed whether they see boom or gloom ahead during appearances at an investors conference on Wednesday.
Dave Watson, president and CEO of Comcast Cable, argued small and medium sized businesses have bounced back from the COVID-19 crisis, only to face inflationary pressures as another economic downturn looms.
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“What we did in the early stages of the pandemic, we’re going work with clients during tough times. That’s a good trademark of cable. We’re going to be respectful of that. And if things get tougher with fuel and other things, we’re going to be mindful of that,” Watson told the MoffettNathanson Media & Communications Summit during a session that was webcast.
He quickly added Comcast Cable will continue to exploit the digital transformation of the video industry accelerated by the coronavirus pandemic. That includes Comcast seeing subscriber growth for its Peacock streaming platform, selling content online, and transactional video-on-demand, where consumers purchase content on a pay-per-view basis — even as the media giant continues to lose traditional cable TV subscribers.
“We’ve said, as we’ve anticipated, we’re going to lose money. We’re not going to chase unprofitable video relationships. That will put pressure on an on-going basis to video,” Watson warned. But that was coming as Comcast Cable re-imagines the video experience for its varied markets.
He pointed to Comcast offering Flex, its aggregated streaming platform and hardware, to shore up its overall customer base. “We’re adding Flex today and the video attachment rate is not that far off, if you add up Flex and linear, from where we were pre-pandemic,” Watson said.
Pay TV subscribers have been declining across the board for years. On May 17, Leichtman Research published a report noting that the top pay TV providers domestically lost a collective 1.95 million subscribers in the first quarter of this year, an increase from a year-ago.
During his own appearance at the investors conference, Altice USA CEO Dexter Goei argued an economic slowdown will not necessarily produce subscriber losses due to the enduring appeal of high-speed Internet access for subscribers.
“It’s fair to say we believe this product, the broadband product, is pretty recession proof. You’d probably give up your hot water or electricity first before giving up your broadband. And so if we go into a recession, which people are potentially calling for, we don’t think that slows down the activity,” Goei said.
He added any recession may slow down customers upgrading to higher product tiers, but would not undercut underlying broadband takeup rates.
