Cable Facing Slower Broadband Growth, MoffettNathanson Analyst Says

Cable's broadband growth may be slowing just as video should come under pressure from over-the-top substitution, with pricing then becoming a chief tool of the cable industry, MoffettNathanson's Craig Moffett Tuesday wrote investors as he downgraded outlooks for Comcast and the cable sector to neutral. He expects pay-TV subscriber declines of 3.2 percent this year, followed by 2.9 percent declines in 2018 and 2019, and 3.3 percent in 2020. The analyst said cable will continue to take market share from satellite, but those gains won't be enough to get the industry back to positive subscriber growth. Moffett said linear-TV providers, pushed by virtual MVPD competition, will increasingly negotiate rights to offer skinnier programming bundles, which will erode gross video profit per customer. He said cable is facing a broadband market that's nearing full penetration. Comcast didn't comment.