The research firm eMarketer says that by the end of last year 16.7 million U.S. adults had already cut the cord and that by the end of this year it will be 22 million.
A day after DirecTV parent AT&T said it would lose subscribers because people are ditching their satellite and cable television services — a phenomenon known as cord-cutting — shares of companies heavily invested in the TV industry tumbled.
Shares of AT&T, the culprit in Thursday’s sell-off, dropped 6 percent, dragging shares of its presumed merger partner, Time Warner, down 2 percent in the process.
AT&T said in a regulatory filing that in the recently ended quarter it would report gaining 300,000 subscribers to its over-the-top digital service while losing 390,000 traditional TV subscribers, for a net loss of 90,000 subs.
While it cited several causes — including hurricanes and changing its credit standards for new customers — it was this line in the filing that Wall Street keyed on: “The video net losses were driven by heightened competition in traditional pay TV markets and OTT services …”
Thursday’s carnage included shares of AMC Networks falling 7 percent; Dish Network off 5 percent; Discovery Communications, Sinclair Broadcast Group and E.W. Scripps Co. each off 4 percent; and Charter Communications down 3 percent.
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