'Flat Is The New Up' For Pay-TV Forecasts

Flat is the new up for pay-TV subscriber forecasts, an analyst said Thursday.

The trend is worrisome for satellite TV investors; less so in the cable sector, which is cushioned by its broadband service offerings, according to Craig Moffett of Moffettnathanson.

"There's no argument that we're witnessing a genuine inflection point" in the market for serving television viewers, Moffett said.

Apple Inc. (NASDAQ: AAPL)'s expected streaming video product will enter a market already thick with newly launched streaming services.

Those include Sony Corp. (NYSE: SNE)'s Vue service and Dish Network Corp. (NASDAQ: DISH)'s Sling TV, with CBS Corporation (NYSE: CBS) and Home Box Office Inc. also providing stand-alone streaming subscriptions separate from their other services.

For cable operators, who typically also offer broadband services, a 10 percent loss of TV subscribers would trim about 6 percent from revenue, but only about 4 percent from gross profits.

"Not nothing, but not a dramatic loss, either," Moffett said.

But for satellite companies like Dish and DirecTV (NASDAQ: DTV), "video represents all of their economics," Moffett said.

"Cable companies should be seen as infrastructure providers, not media companies," Moffett said, although he added the sector "may see a bigger hit than financial performance would imply."