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.
Filed Under: cable tv, cord cutting, covid
Comments on “Wall Street: Traditional Cable TV Sector 'Unraveling' In Wake Of Covid”
I'll buy Theaters
Blaming covid for cable tv failures is a massive stretch. What exactly about covid is harmful to cable and yet helpful for their streaming competition?
We needed to not show certain live sports for a while? Should we do something to make up for that? How about we increase the price of your subscription for the 100th time and then act all shocked when people cancel and blame covid
Re: I'll buy Theaters
SO THIS!
Especially when we’re still paying the SAME cable company for the internet access that allows the "streaming competition" –>Mo Money on top of the increased cable fee and/or internet access fee.
So let’s see.
Moving from cable tv to internet access reminds me of how AT&T "moves" it customers from DSL (copper) to Uverse (fiber to the node, or FTTH).
Re: Re: I'll buy Theaters
Well, that’s certainly a problem with the state of the US ISP market if you don’t have the choice to switch to a better service. But, all things being equal I’d argue that paying something for a service that’s actually being used is better than paying for services that you don’t use, even if you’re paying the same price at the end of the day.
Re: I'll buy Theaters
"What exactly about covid is harmful to cable and yet helpful for their streaming competition?"
People have lost their jobs and need to cut costs. They’re inside a lot more than they used to, and realise they spend a lot more time watching their $10/month Netflix subscription than they do watching the $60/month cable TV package, or that the downsides to using Hulu and free services like Tubi were no longer the deal breakers they used to be now that they had time to shop around properly.
"We needed to not show certain live sports for a while?"
Well, paying extra for a service that cannot currently be accessed is certainly an incentive not to be paying that.
The people jumping ship now are probably the people who kept their cable subscription through laziness or because they did like to watch the occasional game. Once they had an incentive to be less lazy and couldn’t watch any games, that was the motivation to dump their subscription.
It would probably be more accurate to describe COVID as something that accelerated what people were starting to do anyway, but I think it’s clear that it had an effect.
Re: Re: I'll buy Theaters
covid created challenges and opportunity for them, the same challenges as opportunities that it created for their competition and as usual streaming stepped up and cable stepped down..
Re: I'll buy Theaters
Sports are a legitimate contributing answer for why – especially earlier on before they got to cardboard cutout audiences.
Re: Re: I'll buy Theaters
The minor interruption to live sports is not a legitimate reason, although their
mishandling of the minor interruption to live sports would be a reason. They basically elected to lose the subscribers in how they handled the interruption which is the same as how they have been handling cord cutting in general; try to bleed as much as they can from their existing customers.. If people cancel it’s not a problem we can just raise the price for whoever remains.
The fact that netflix swooped in with the last dance to fill the gap for instance or the fact that they used the opportunity to give their customers the middle finger and dare them to cancel their subscription instead of making any sort of gesture acknowledging that they weren’t holding up their end of the deal while the short outage was on to try to keep their customers.
Re: Re: Re: I'll buy Theaters
"The minor interruption to live sports is not a legitimate reason"
According to whom? For a casual sports fan who only occasionally tuned in, faced with an indefinite interruption to play that made the extra expense stick out like a sore thumb, that’s a perfectly legitimate reason to finally switch it off.
"The fact that netflix swooped in with the last dance to fill the gap for instance"
Except, that’s not really what happened. Many people would have been subscribing to both Netflix (and/or one of its competitors) as well as cable. If Netflix turned out to be giving their users better value for money than cable, that’s not swooping in, that’s cable outstaying their welcome.
We’re not talking about people who used their newly found lockdown leisure time to try Netflix and suddenly found a new world. We’re talking about people who have been aware for a long time they’re paying a premium, and when they found they were happily watching Tiger King instead of flicking through 200 channels of things they don’t want to watch, they decided to stop paying for the latter.
Re: I'll buy Theaters
‘What exactly about covid is harmful to cable and yet helpful for their streaming competition?"
It has very clearly highlighted how the latter provides much better value for money than the former.
Re: I'll buy Theaters
"What exactly about covid is harmful to cable and yet helpful for their streaming competition?"
The reduction/cancellations of live sporting events (the only reason some sports fans hadn’t already cut the cord) and shutdowns and delays in putting out new shows hurt cable TV more than streaming services. The streaming services were also hit by the production slowdowns and halts earlier this year, but with their big libraries viewers could still find worthwhile things to watch.
What you can't see
Like a magician’s or huckster’s trick. Can you see all those bogus fees on your bill? Not until after you have signed up. They’ll never mention all those bogus fees, because they are hidden fees. Therefore you can’t see them or be allowed to know about them until after you have committed. And maybe not even then.
So much money saved, 1 or 2 streaming services at a time, 920 down /940 up fiber internet for $85 a month before minimal fees.
Before was near $300 a month for 5 boxes and 100 mb/s cable internet.
I cut the cord because I hated paying for ESPN, only thing I missed was Adult Swim. Now that Adult Swim cancelled Venture Brothers, No reason whatsoever to ever consider Comcast again.
Just roofed my house with the savings. Spent 2 weeks doing it with my brother instead of paying someone else, because of all the free time I have not watching TV.
You saved $ by both switching ISP’s and dropping cable TV. It’s great that you had the option to switch ISP’s; all of America should have that option.
adapt-or-perish
Unfortunately they think that means raise prices despite all signs for years that doing so causes customers to leave.
Long ago gave up on paying for cable tv. Hundreds of channels and nothing I cared to watch. Why pay for something you aren’t interested in?
I don’t care for sports, why should I pay for that?
I do just fine with an antenna and have no cable bill to pay. I don’t watch all that much tv to begin with. I’ve found other things to do with that time. I no longer feel like I want my time back I spent watching some dumb program. I watch the local news which mostly isn’t carried on cable.
In the end, not counting the costs, there’s still a lot of good reasons I no longer have any interest in cable.
Re: Re:
For a few weeks after moving into my first apartment, the cable TV subscription was still running from the previous tenant. I found a single show that I both had time to watch, and was interested in: Black Adder.
And a single show does not a cable purchase justify.
Re: Re: Re:
As a student, I used to always check for that when I moved, and was very excited to find free cable twice. Free for the whole time I lived there, and I’d always let neighboring students connect to my splitter.
The last time I moved, I didn’t even care enough to check. Eventually a cable guy showed up and said I’d had free cable all along, and he’d leave it connected if I was planning to sign up. Nope; I wasn’t watching for free, so I’m not going to pay more than that. Watching on someone else’s schedule is so archaic. Plus, the networks shit ads and bugs on top of the shows now, as if they’re some weird social experiment on how much people are willing to put up with.
Adapt or perish
I can’t help rooting for the "perish" option.
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.
C'mon guys...
Vote for Trump, Make Cable Great Again!
Re: C'mon guys...
All humor aside, Trump is part of this.
The common bellyache is that the government isn’t "making" the cable TV industry compete (as the government thinks it should compete). Well, government coercion to compete (as the government decides what competition is) is as much a nanny state as is government control of an industry to perform what the government decides the industry should perform. Both are identical in essentials.
President Trump is not stepping in while the cable TV industry is imploding. If the industry can fix itself, then fine. If the industry collapses then fine. That is part of competition. Strange as it sounds, cable TV is not directly a matter of life and death. In the case of collapse, the ordinary employees will need to find other jobs. Parasite managers and execs will be bailed out by their cronies. Life goes on, and alternatives exist or will arise.
If cable TV can’t hack it, good riddance. The failure to act by the Trump administration is part of allowing corporations and industries determine their own future, good or bad.
As for cable TV’s future, how did Scrooge put it (paraphrased): "If they (cable TV) would rather die, they had better do it and decrease the surplus population (of corrupt/inept corporations)!"
Re: Re: C'mon guys...
During the last election, Trump spent an inordinate amount of time obsessing over the coal industry, even though the problems faced by that industry were completely due to the free market and jobs in renewable energy were more lucrative. In recent days he’s been obsessing over a false claim about Biden’s approach to fracking, and essentially claiming that certain states are doomed without this niche industry.
It would not surprise me if this was not a political prop in the next few days for pointless grandstanding in the same way.
"President Trump is not stepping in while the cable TV industry is imploding"
He has been stepping in, installing Pai as his crony who will protect everything from abuse of the lack of net neutrality to monopoly abuse to protecting the legacy industry from actual competition. He just didn’t count on the few areas where Americans still have an actual choice.
It must be nice to have the option to ditch cable and put the antenna back up. Small-town Canada increasingly doesn’t have that option, as the networks are owned or controlled by the same people who control the cable and dish duopoly, the stations are owned by the networks and the networks are taking many of the stations dark to avoid having to rebuild their facilities on new channels because of the 5G mobile UHF "repack" that’s taking everything above channel 36 and selling it to the mobile phone bandits… which are also conveniently controlled by the same companies.
I’m in the 1000 Islands. A TV aerial here finds one digital subchannel from one Canadian station in Kingston ON (pop 123798) and eighteen digital subchannels from three full-power and two low-power stations in Watertown NY (pop 27000). It’s gotten to the point where Home Depot US stocks Channel Master products, Home Depot Canada does not.
Mexico, with Televisa owning more than half of everything and Azteca owning most of what’s left (other than one token educational channel) is just as bad. Be glad if you still have the option to cut the cord… as concentration of media ownership is taking that option away from many of us.
Re: Re:
Streaming services, not antennas, are the main competition to cable TV. The number of people who ditch cable TV in favor of an antenna is probably about the same as the number who ditch it in favor of public libraries.
Being in Canada, you should at least have the option to sign up for a third-party VDSL or cable ISP, rather than dealing with Bell or Rogers directly (or Comcast or nobody, as in the USA).
Re: Re:
Looked at your area.
https://www.antennaweb.org/results
You would need:
Large directional antenna(motor driven to change directions)
Good booster
And good height(above most trees)
This suggests 7 channels.
What could be nice is if there are a few people Near you, and you could all share the signal from a Large Antenna. as well as the costs.
https://www.amazon.com/Five-Star-Satellite-Supports-Installation/dp/B082DNTMCW/ref=sr_1_31?_encoding=UTF8&c=ts&dchild=1&keywords=TV+Antennas&qid=1603823984&s=audio-video-accessories&sr=1-31&ts_id=172665
https://www.amazon.com/Element-Bowtie-Indoor-Outdoor-Antenna/dp/B00C4XVOOC/ref=sr_1_62?_encoding=UTF8&c=ts&dchild=1&keywords=TV+Antennas&qid=1603824115&s=audio-video-accessories&sr=1-62&ts_id=172665
These 2 are very good.
But you should find someone near you that has a setup
Re: Re: Re:
Cool! We could call it Community Antenna Television (CATV).
Re: Re: Re: Re:
yep, and if you talk to the city/area and there is a water tower, you are Totally set.