Paige Coker worked a nearly empty bar in the Old Majestic Brewing Company in Mobile, Ala., on March 21. Sports bars that remain open say they have no games to show anyway.
Photo: dan andrson/ShutterstockAmericans’ urge to disconnect the living-room cable is spreading to Main Street.
Recent results from pay-television providers show that U.S. households are continuing to drop their channel bundles in droves during a coronavirus pandemic that has forced millions indoors. While some lockdown measures are beginning to lift, the restrictions have also been driving bars, restaurants and hotels to cancel or pause TV service while they wait for customers to return.
Hotels have stopped paying for TV sets in rooms where few guests are staying, according to pay-TV companies and analysts, and some airlines are pushing for breaks on the cost of in-flight entertainment. Sports bars that are able to open their doors say they have no games to show in any event.
Commercial accounts are a sliver of the more than two million TV customers that cable and satellite companies lost during the first three months of 2020. But the suspensions are making a challenging situation worse for traditional channel distributors already squeezed as growing numbers of viewers shift to streaming services such as Netflix Inc., Amazon.com Inc.’s Prime Video and Walt Disney Co. ’s Disney+ and Hulu.
On Thursday, satellite-TV provider Dish Network Corp. said it had paused or waived charges on about 250,000 commercial accounts. Dish finance chief Paul Orban said the “vast majority” of those clients would start paying again in the coming quarters, but he didn’t specify a timeline for such a recovery.
DirecTV owner AT&T Inc. reported lower revenue from hotels, bars and restaurants in the first quarter without quantifying the decline.
Monsoons Tap and Grill saved more than $1,600 a month by cutting its subscription to DirecTV, which told the restaurant it could pause service through the summer, according to co-owner Daniel Liebeskind. The Tucson, Ariz.,-area business plans to reopen to in-person diners in the coming days, without its typical baseball and basketball games on TV and with tables spaced farther apart.
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“We actually turned them around so they’re not facing the TVs, because there isn’t anything on,” Mr. Liebeskind said. Baseball, basketball and hockey leagues have put their games on hiatus.
Pay-TV companies are expected to face a harder time maintaining revenue from more vulnerable businesses struggling to survive the summer.
“The most disconcerting, troublesome area that we’re seeing is what’s happening down in small business,” AT&T Chief Executive Randall Stephenson, who plans to step down as CEO at the end of June, said during an April conference call.
The closure of small businesses across the board has dented pay-TV company earnings.
“It will likely take time for this part of the business to recover,” Charter Communications Inc. Chief Financial Officer Chris Winfrey said of the small-and-medium-business segment in an April earnings call. Mr. Winfrey added that certain bars, restaurants and hotels are among the businesses that have reduced service or monthly bills until they fully reopen.
Charter, which has nearly two million small-business customers, said many of its business customers are still closed.
AT&T lost more than one million domestic pay-TV customers in the first quarter and warned of more defections from cash-strapped households and businesses later this year. Dish ended the March quarter with 413,000 fewer paying subscribers.
Comcast Corp. saw 409,000 customers cancel their pay-TV subscriptions in the first quarter, more than half of its total 2019 pay-TV subscriber losses. The company partly attributed the first-quarter losses to a price increase; cable TV revenue remained flat for the same reason.
TV screens were dark at the New York-New York hotel and casino in Las Vegas on March 17, at the start of coronavirus-related shutdown of the Strip.
Photo: Gene Blevins/Zuma PressComcast, Charter and Altice USA Inc. have so far managed to offset the pay-TV revenue drop with more broadband internet subscribers. Internet use has soared over the past two months as millions of U.S. residents stayed home during the pandemic and picked up on-demand services like Netflix.
Craig Moffett, an analyst for telecom consulting firm MoffettNathanson, said the virus—and the loss of live sports—has accelerated a “death spiral” for the pay-TV category.
“Sports are the glue that hold the whole thing together,” Mr. Moffett said. “Without sports, the system is unraveling.”
Eric Goldspiel owns three bars: Divine Bar and Grill and 895 Bar, both in Brooklyn, N.Y.; and El Coqui Bar & Billiards in Queens, N.Y. He said he would likely close two of them permanently.
His DirecTV service has been suspended at all three locations, and the internet service—provided by Altice’s Optimum at the two Brooklyn bars and Charter’s Spectrum in Queens—lapsed.
Mr. Goldspiel has applied for Paycheck Protection Program loans, to pay his 28 staffers across all three locations. “I’m not going to use a PPP loan to pay my cable bill,” he said.
Mr. Liebeskind, the co-owner of Monsoons, said he expects to pay for live sports after games restart. But for now, the owners and their families are making do with prerecorded TV while they fulfill pickup orders.
“If it gets boring during the day, we have Hulu,” he said.
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com and Lillian Rizzo at Lillian.Rizzo@wsj.com
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