Wall Street Suddenly Wakes Up To Cord Cutting

from the good-morning-sunshine dept

Most of the cable and broadcast industry's cord cutting denial is aimed at investors, who -- if you've yet to realize -- may not always have the firmest understanding of the technology they're investing in. While many investors have been buying the cable industry's argument that cord cutting either doesn't exist or is only something done by losers and nobodies, the recent sharp decline in ESPN viewership appears to have finally woken the investment community from its adorable slumber.

As we recently noted, ESPN has lost 7.2 million viewers in the last four years, and a little more than three million in the last year. Since ESPN is annoyingly force-bundled with most basic cable subscriptions a lot of these users are cord cutters. Many more are being lured away by the new realm of "skinny" cable options that may not include ESPN -- options ESPN has been suing to stop to "protect innovation." ESPN is stuck in legacy industry purgatory: offer a standalone streaming service and accelerate cord cutting -- or refuse to offer a standalone streaming service -- and accelerate cord cutting. Either way, the train has left the station.

When Disney earnings last week indicated ESPN's fortunes are getting worse, investors in all of the major cable and broadcast companies suddenly became notably nervous as they collectively realized ESPN is no longer the untouchable television juggernaut it wanted everyone to believe it is:
"In the old days — basically, up until a month ago — most people in the video world assumed ESPN was untouchable. It commanded the biggest subscriber fees from traditional pay TV providers, and even if you imagined that one day people would start buying TV over the Internet from people like Apple, it seemed as though it would do just fine in that scenario, too."
And ESPN's been one of the more solid performers. Children's programming has been absolutely demolished by services like Netflix. Investors and cable executives have tried to argue that they can make up for cord cutters and ratings drops by endlessly raising subscriber TV rates, though they'd quietly been warned for years that this wasn't a winning long-term strategy. The ugly truth is that cable and broadcast is going to have to compete on price if it wants to adapt to the internet video revolution, and that's a message that's hard to hear when your head is planted squarely in the sand.

Just wait until Wall Street realizes (perhaps in 2018?) that there are tens of millions of young Americans who've never signed up for a cable subscription and have no intention of ever doing so.
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: cord cutting, espn, internet, streaming, wall street
Companies: disney


Reader Comments

Subscribe: RSS

View by: Thread


  • identicon
    Michael, 11 Aug 2015 @ 3:21am

    Just wait until Wall Street realizes (perhaps in 2018?) that there are tens of millions of young Americans who've never signed up for a cable subscription and have no intention of ever doing so

    Or when they realize that tens of millions of young Americans would rather invest money directly via crowdfunding rather than purchasing stock on Wall Street.

    reply to this | link to this | view in chronology ]

  • identicon
    me@me.net, 11 Aug 2015 @ 3:58am

    Ththey find themselves where the music industry once did

    They could have offered ala carte but no, bundle, bundle, bundle

    Every action brings reaction, now its adapt or die.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 11 Aug 2015 @ 4:30am

    Their apathy is bringing about their own demise

    My wife and I finally had it with Cox Cable. After months of service interruptions and every channel we watch randomly go temporarily off air for some reason. We terminated our cable and picked up a Roku. There's been times I did look back but not having to deal with service calls and constant customer service transfers/holds brings me back. Now if only I can find a real international news channel, I'd be set.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 11 Aug 2015 @ 7:35am

      Re: Their apathy is bringing about their own demise

      see if you would be happy with SkyNews, in Roku!

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 11 Aug 2015 @ 3:20pm

      Re: Their apathy is bringing about their own demise

      BBC World and Al Jazeera English :) Those two will give you most of what you'd want.

      reply to this | link to this | view in chronology ]

    • identicon
      Nameless Nobody, 1 Nov 2015 @ 4:45pm

      Re: Their apathy is bringing about their own demise

      You can get great international channels via Channel Master, which in addition to getting superlative HDTV football games way better reception than cable or Dish- (and other sports) on local channels, also offers free Internet based channels from France, Russia, BBC, etc along with OTA (over the air) Local channels. BTW, Disney's Eiger might be the leading media magnate with his head in the sand. "WHAT, we can't charge for both Pay-TV and then feed them 14 minutes of Procuct Ads to go with their 42 minutes of content per hour?" - the other 4 minutes go to Channel Ads. Eiger needs to understand that now he's so outdated that he'suddenly driving a Ford Tin-Lizzie straight out of the 1930's ... AND THE PUBLIC IS NOT GOING TO TAKE IT ANYMORE !! Nameless but also Prevasive here ...

      reply to this | link to this | view in chronology ]

  • icon
    Groaker (profile), 11 Aug 2015 @ 4:33am

    Young people only?

    reply to this | link to this | view in chronology ]

  • icon
    Groaker (profile), 11 Aug 2015 @ 4:35am

    Young people only?

    I "sell" (for kudos, not money) cord cutting to seniors, or which I am one. Few have any problem hooking it up. Of those that do it is more fear of causing damage than lack of knowledge.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 11 Aug 2015 @ 5:28am

    Cut/Uncut

    I've cut and un-cut in the last year. So even though statistically I'm a cable subscriber now, in the long run they are dead to me.

    I cut the cord for a year and didn't miss it. I even live in an area where I don't get (much) broadcast. (In a major city, but in a reception black hole.) I still need internet, but I got all the TV I cared to see through my Roku. Any live events I really wanted I was able to stream live on my laptop.

    I recently moved and had to change providers, so I got a bundle at an introductory price, not much more than they would have charged me for internet alone. So I took it. I've watched almost nothing live. I did "catch up" on a show after weeks after it started. I think I could have done that without the TV package, too. So when my special offer expires and they try to double my rates it's going to be hard to justify the higher price.

    reply to this | link to this | view in chronology ]

  • identicon
    Rick, 11 Aug 2015 @ 5:32am

    Seniors - Baby Boomers

    They are also forgetting the Seniors who retire, who can no longer afford over $100 a month for a "TV" service that was free over the air when they were growing up. It's still free now - with an antenna. A Digital DVR is a couple of hundred, and can be programmed like a VCR. Free TV listings are available at TitanTV.
    If Sling (Dish offering) could offer "speciality" channels (minus ESPN) for $1 a per channel you pick, it would take off must faster/higher. I don't like their current offering.
    I have an HP Stream 200-010 Mini Desktop that goes for $178 (at amazon); a Windows 10 PC that can view any source from the internet that a regular PC can. Small form factor with HDMI & Display Port outputs with wireless & Ethernet ports.
    In between that and Netflix DVD service, I can watch everything I want (but a year later for the DVDs to be released).
    Savings: Over $1,000 per year...

    reply to this | link to this | view in chronology ]

  • identicon
    HaroldK, 11 Aug 2015 @ 6:16am

    ESPN Programing

    I have the forced ESPN package of channels. I never watch. Why? Because the programming sucks. Why pay for something you don't watch. I recently became a cord cutter.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 11 Aug 2015 @ 6:19am

    In the uk and ireland you can buy cable tv,
    basic entertainment channels,with no sports channels 20 euro approx per month.
    And theres around 50 fta free channels on satellite .
    buy dish and satellite reciever 50 euros approx.
    IF you want to get the sports channel,s soccer ,rugby etc youll pay approx 50euro per month.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 11 Aug 2015 @ 8:24am

      Re:

      But what about BBC-tax, installation, bundled items etc.? I can get it cheaper here in mainland Europe, but the secondary costs are more than killing the value.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 11 Aug 2015 @ 6:26am

    Our new forced upon us plan doesn't include ESPN. After being required to have a cable box for each TV we had to choose which TV it would be and live with that. Went through hell getting the one channel we did want and that channel only offers certain movies on line at a per movie purchase price, and it isn't a premium movie channel at that. The phone is gone, the car is sitting waiting to be sold, I imagine cable TV and internet are next. We both hold full time jobs but work under the American corporate structure with no hope for a living wage. Thank heaven we haven't had any children. Once they kill off the middle class there will only be the wealthy remaining to purchase their products, so I really don't give a damn if they raise their prices and offer fewer options in the future. I don't care anymore. Just keep stock piling your profits corporate America, and see what that gets you.

    reply to this | link to this | view in chronology ]

  • identicon
    Anon, 11 Aug 2015 @ 6:49am

    Political consequences?

    Suppose fewer viewers watched Faux News, or the DemoPublican debates, or the various demagogues. Could we be facing a sudden outbreak of common sense?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 11 Aug 2015 @ 9:08am

      Re: Political consequences? None, till political/social/economic collapse. Common sense: Never.

      As a life long resident of the U.S.A. I've watched the majority of the population become a lazy, obese, selfish, cowardly mob, more precisely anthropoid apes. They reject the responsibilities inherent in a democratic society. All they want is to pursue their lust, their lust for wealth, power, pleasure and blood. The leaders are simply the alpha beasts. The minority who recognize their responsibilities don't have the means to impact society. I, for one, am rather sorry for the situation, but must face facts. As for the future, there is no us in U.S. .

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 11 Aug 2015 @ 11:01am

        Re: Re: Political consequences? None, till political/social/economic collapse. Common sense: Never.

        "watched the majority of the population become"

        Or ... you began to observe rather than ignore that which goes on - and there was little change in others, it was you that changed. It could happen.

        reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 11 Aug 2015 @ 7:10am

    The solution is right there under their noses much like other cases. The telcos are afraid of Whatsapp and the likes so why not cut the voice channel and integrate it to hte data one and bring everything to the internet for very cheap prices? As for the cable, cut the bandwidth used to deliver the channels and offer higher speeds and streaming services for everybody. You know, do what Google did and treat the entertainment part as a separate entity from the internet one. People will still need the internet to stream. The possibilities are there. They just need to be tried.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 11 Aug 2015 @ 7:32am

    Hearing the continuous press coverage of cord cutters, I feel sad for Aereo, it just missed the bus narrowly. What you call it bad karma!

    reply to this | link to this | view in chronology ]

  • identicon
    Rekrul, 11 Aug 2015 @ 11:16am

    The only reason I still have a TV subscription is that it's literally cheaper to keep it than to get rid of it. As long as I keep the TV service, my internet service is grandfathered at a lower rate (although it recently went up $10). If I make any major changes to my plan, like getting rid of TV service, the price for internet service doubles, and the phone goes up as well.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 11 Aug 2015 @ 3:29pm

      Re:

      Sounds like you need to switch to an ISP that isn't run by a Cable or Telephone provider.

      ...

      Yeah, that was a morbid joke.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 12 Aug 2015 @ 11:31am

    11 Years Clean!

    I cut the cord back in 2004, mostly because of trying to be a single mom raising 3 teenage girls....but now that they are grown and gone, I still won't be going back to cable.

    I do, however, live off Netflix, Hulu (soon to be gone), and Google Play.

    Sure, there are times I missed some things, and THAT was frustrating (severe weather alerts during tornado season)...but cord cutting did force the local stations to beef up their streaming video over the Internet during severe weather, which was nice.

    reply to this | link to this | view in chronology ]

  • identicon
    NOYB, 14 Aug 2015 @ 1:56pm

    In 1983 - Cable was a bargain. First rate movies at a discount.

    Hollywood's greed killed it.

    No one in their right mind will pay these charges for 3rd tier movies.

    And those efforts to kill most home recording? Taste the blowback. Keep it!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous, 13 Sep 2015 @ 12:48pm

    ESPN Content

    Well, maybe ESPN should consider just being EF/BN, because the only content they display is Football and Baseball. So much for being a Sports Network...

    reply to this | link to this | view in chronology ]

  • icon
    Jared (profile), 18 Nov 2015 @ 3:06am

    Cord Cutting

    cordcutinfo.com is a site devoted to cord cutting and if you feel as though anything should be added or disagree with anything leave a comment or contact the admin.

    reply to this | link to this | view in chronology ]


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)

Close

Add A Reply

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!

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

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.