Wall Street: Traditional Cable TV Sector 'Unraveling' In Wake Of Covid

from the adapt-or-perish dept

While COVID-19 has been great for some sectors (like video games or webcams), it's beating traditional entertainment options (like brick and mortar movie theaters and cable TV subscriptions) to a pulp. To the point where Wall Street analyst Craig Moffett has declared that the traditional cable TV sector is unraveling thanks to a sharp spike in cord cutting. Recent data suggests that traditional pay TV subscriptions have dropped 22.8% from its peak back in 2014. And by the end of 2024, analysts expect that fewer than half of US homes will subscribe to a traditional pay TV service.

A need to cut household costs, fewer live sports, obnoxious price gouging, and lousy customer service have all fused into a much worse problem, proclaims Moffett:

"According to Moffett’s estimates, pay TV subscribers fell 7.7% in Q2 (8.3% if pandemic-related nonpay customers are excluded), the worst ever for the sector. And it comes after eight consecutive quarters of worst-ever losses. That forebodes a scary trend for the business.

“At this rate of decline (somewhere between 7.7% and 8.3% per year), the traditional pay TV business would disappear entirely in another 12 years,” Moffett wrote, adding that just two years ago, the rate of decline was 3.3% while last year fell at a 5.4% clip.

“The pay TV ecosystem is well and truly unraveling,” Moffett wrote.

Fairly amazing for a trend the industry (including Moffett) spent years either downplaying or denying entirely. Cable executives had recently been trying to claim the trend would soon be reversing itself, a bit of prognostication that's not looking so hot.

To be clear, giants like AT&T and Comcast will be fine. They enjoy major broadcast empires and vast monopolies over broadband, allowing them to counter these losses by jacking up the cost of broadband service with little to no market or regulatory repercussion. But if they want to continue making any meaningful money off of television, they're going to have to finally do things like seriously compete on price (gasp) and actually investing in customer service (streaming alternatives routinely score far higher on customer satisfaction due to better service, lower prices, and greater flexibility).

Actually trying on this front means not socking consumers with cable TV bills that are packed with so many bogus fees, your total due can be up to 45% higher than the company's advertised rate. Actually trying means genuinely investing in customer service instead of routinely offshoring support to substandard subcontracted services. These are changes the industry could have embraced years ago, but it's abundantly clear many executives believed that the traditional cable TV cash cow was going to live forever. Now, due to decades of denial, the mad scramble from behind the eight ball begins.

Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: cable tv, cord cutting, covid


Reader Comments

Subscribe: RSS

View by: Thread


  1. icon
    ECA (profile), 26 Oct 2020 @ 11:21am

    Econ 102, how much can you Squeeze from a Turnip.

    I could go into the numbers on this And bore all of you, as most of you Probably already get the idea.
    After you take taxes out of a workers pay check,
    After his bills, Insurance, Car payments, Rents, Food, Family, and a few other misc. Things THEY HAVE TO PAY.

    What are the first things you drop, to save money?
    Beer, entertainment, and the dog.
    You will go cheap on the beer, the Dog gets Cheaper food or eats at the table, and the entertainment? How to make it Cheap?
    ASIF, you dont still have some 50+ yo people who REMEMBER that there is a BROADCAST SYSTEM, and HOW it works. And why there is a Channel selector ON THE TV.

    Yes its kinda nice to have 200+ channels to watch, but do you REALLY watch all, most, a fair amount of them?
    Are most of the channels from a Group that rotates the shows? And you end up with all of them showing the SAME, as the others during the year? Do you REALLY watch allot of sports? religion? Alternative language? News? Opinion?
    How about you really look at the list, and decide how many you could LIVE WITH. Generally I will bet <20. So out of 200 channels, you watch 20. 1/10, but you pay 100%. If you could Pay for what you watch(FCC was trying to get this done, ala carte). Why in the world are you paying >$100 per month when it Could be $10.
    Some of the companies have figured some of this. And gone to the internet, but They are charging $??. about 10 times as much as you SHOULD be paying for their service. The Cable corps dont pay NEAR what you Will be paying.
    So, lets install the equipment and see whats Around the area. Ifyou are in Metro area, and have a good setup, Probably about 3-4 locations to point the antenna at and 40-100 channels, with allot of over lap. CBS, NBC, FOX, Independents, and Many common channels, and some REALLY interesting, strange and religious.
    Now the question. Can you deal with whats out there? And Why in hell have you been paying $100 per month for Many of the same channels you can watch Locally. For the last ?? years?

    The real question is can you get a return on what you paid Cable/sat. NOPE.
    Paying for a perpetual service is paying perpetually.

    And WHy do all the corps get Raises? and we dont.


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Insider Shop - Show Your Support!

Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads
.

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.