VMVPDs Not Cord-Cutting Driver After All, Analyst Moffett Says

The accelerating rate of cord cutting as vMVPD uptake stumbled shows those over-the-top services aren't a big driver of the trend, said analyst Craig Moffett of MoffettNathanson in an interview on C-SPAN's The Communicators set to run this weekend. He said "the new normal" for traditional pay TV is subscriber declines of 5 percent or so per year. He said there's an ongoing bifurcation between sports watchers and entertainment viewers, with the latter leaving cable and direct broadcast satellite as sports programming's fixed costs keep driving up pay-TV subscription costs. Moffett said the state attorneys general challenge of T-Mobile/Sprint has "reasonably good odds" of derailing the deal since the takeover isn't meaningfully different from the first iteration of the transaction that DOJ rejected. He said it's unlikely any tech giants will be broken up under the current antitrust scrutiny because antitrust laws aren't well suited for that and Congress isn't likely to undertake an overhaul soon. He said net neutrality is a hot-button issue largely because the debate was cast in terms of "bad guy" ISPs and "good guy" companies like Netflix. But net neutrality no longer energizes the base and thus is absent from discussion by the Democratic presidential candidates. Moffett said the U.S. is "still a few years out" from having wide blocks of midband spectrum needed to enable the transformational services 5G promises, so in the near term, it will rely on narrow midband blocks. On vMVPDs, they're struggling because they have "fallen into the same trap" as traditional MVPDs by having to offer increasingly fat and expensive programming bundles, the analyst said. Eventually, live TV will be the home only of sports and news, with all other content moving to on-demand, he said. Cable system operators don't necessarily care about sustaining the bundle and can focus on their broadband offerings, but DBS operators "are in a much tougher position," he said, programmers even more so.