TV cord frays as viewers find new screens

The central thesis of broadcasters and pay-TV providers: cord-cutting might be fashionable for trendy elites, but it has yet to make a dent in “real” America’s love affair with television. That theory is coming under attack like never before.

The second quarter is always tough for the pay-TV industry, as families move home and college students disconnect, but this time it was the worst on record for net customer losses: an estimated 566,000 people cut the cord. With the exception of Verizon, which is still rolling out its video service, all pay-TV companies lost subscribers during the quarter. Worse still, the poor performance comes against the backdrop of improving macro trends that are usually positive for the industry, including a rise in new household formation following several years of stagnation. With roughly 100 million US pay-TV subscribers, the loss of half a million customers does not equal Armageddon. The subscriber base shrunk 0.7 percent year-on-year in the second quarter, its sharpest contraction on record, but nowhere near as precipitous as the declines seen in other media businesses such as newspapers and recorded music. But after a decade of fretting about cord-cutting, investors think it has finally arrived.