COVID-19 Linear TV Ratings Boost Won't Reverse Cord-Cutting, Says Cowen
Traditional video ratings are “solid (for now),” Cowen analysts wrote investors Tuesday, but unit losses could have “further downside” from a COVID-19 recession. Though linear TV ratings are “up meaningfully” during the crisis, Cowen expects “heightened cord-cutting pressure due to…
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a COVID-19 driven recession” as linear TV’s price-value becomes top of mind for subscribers vs. over-the-top video, said analyst Greg Williams. In this macro environment, traditional video is a “2-sided coin”: Live local news is leading higher ratings for traditional TV, though sports cancellations and delays could affect the value of traditional video, noted Williams and colleague Colby Synesael: Cord-cutting trends should continue, as hourly employees look for ways to shed personal expenses, and streaming services provide cheaper video options. Cutting the cord involves sacrifice, but the wide selection of options in this OTT era makes that decision “more tolerable in a recession,” said the analysts, forecasting a 4% drop in cable subscriptions this year. OTT and pay-TV services are riding the wave of sheltering at home: Since the week of March 14, the Starz app has had a 44% bump in average viewership and a 142% increase in new customers, and Disney reported April 8 it had passed 50 million paid subscribers globally, noted analyst Doug Creutz. The coronavirus outbreak has driven a “significant linear ratings tailwind” for most cable network groups “other than Disney," he said, whose ESPN network was slammed by the shutdown of live sports.