AT&T’s stock ended its steady march higher Tuesday, dropping nearly 3% after respected Wall Street analyst Craig Moffett downgraded the telecom and media giant’s shares and called its pay-TV unit a “cancer.”
The U.S. pay TV business lost more than 1.5 million subscribers in the second quarter, hitting a loss rate of 5.4%. Given the obvious fault lines, the trend isn’t surprising, or even interesting, said MoffettNathanson analyst Craig Moffett. Certainly, cord cutting isn’t going to go away, but the loss rate should decelerate in the third quarter, the analyst predicts.
Video customers are worth substantially less than their broadband counterparts as viewership and focus continues to shift away from providing pay TV service and more toward broadband connectivity, MoffettNathanson principal and senior analyst Craig Moffett said at the National Cable Television Cooperative Winter Education Conference in Atlanta Monday.
Punctuated by the loss of 281,000 customers in the second quarter, Dish Network’s steady stream of retrans battles and carriage wars has resulted in the loss of 7.5% of its subscriber base in just one year.
Craig Moffett, an analyst with MoffettNathanson said that optimism over broadcaster windfalls in next year’s spectrum auction could be very misplaced since it is premised on a belief that the wireless business is healthy enough to spend like it did in the AWS-3 auction. “The reality is the companies are not generating enough cash to be able to sustain the kinds of purchases that they made in the AWS-3 auction and to try to do it again,” said Moffett at the State of the Net Wireless Conference on Monday in Washington.
MoffettNathanson analyst Michael Nathanson keeps an eye on the big multimedia companies including 21st Century Fox, CBS and Disney. In this exclusive Q&A he talks about the TV advertising shortfall, the critical role of the NFL in broadcasting, why he think retrans and reverse comp will keep growing and more.
No one on the planet may know more about the pay TV business than Craig Moffett, who analyzed it consistently and cogently for about a decade at Bernstein Research up until the end of last year. He resurfaced last month at his own research firm, Moffett Research, and returned Monday to the subject he knows so well with a simple message that stood out from the rest of a 135-page coverage initiation document: “cord-cutting is real.”