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.
“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.