These are troubling times for Big Cable and things are not likely to improve anytime soon. That’s the takeaway from a new research note from MoffettNathanson in which the firm looked at the accelerating decline of traditional pay-TV subscriptions. The firm downgraded cable giant Comcast from “buy” to “neutral.” It also downgraded the cable sector as a whole from “overweight” to “neutral.” The firm notes that Comcast shares have tripled over the last five years and major cable stocks have been trading at their highest multiples since the telecom bubble of the 1990s. The new ratings bring the sector more in light with the current reality, MoffettNathanson writes, in which traditional cable viewing will come under more pressure from over-the-top services like Hulu and SlingTV while broadband growth at the cable companies will inevitably slow down. It’s not a apocalypse yet, but a “more credible, and less bombastic, scenario.”
So just how bad are things going to get? Well, cable companies are also broadband companies, so as long as you need internet pumped into your house, ditching your cable company won’t be so simple. But cord-cutting is real and getting worse: As we reported in May, providers lost an estimated 762,000 pay-TV subscribers in the first quarter of this year, making it the worst quarter ever. Ironically, Comcast was the only major cable company to buck the trend. We’ll know soon if its good fortunes will continue in Q2.