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.

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Companies: disney

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Comments on “Wall Street Suddenly Wakes Up To Cord Cutting”

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Michael (profile) says:

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.

Anonymous Coward says:

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.

Nameless Nobody (profile) says:

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 …

Anonymous Coward says:


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.

Rick says:

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…

Anonymous Coward says:

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.

Anonymous Coward says:

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.

Anonymous Coward says:

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. .

Ninja (profile) says:

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.

Rekrul says:

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.

Anonymous Coward says:

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.

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