Industry Claims That Cord Cutting Would Be A Fad Aren't Looking So Hot

from the adapt-or-perish dept

Remember when the cable industry used to pretend that cord cutting wasn't real? Or perhaps you remember that once the industry was actually willing to admit it was a real trend, they'd claim it was only something being done by losers living in their parents' basement?

Or perhaps you'll remember the cable and broadcast industry claims that cord cutting was just a temporary phenomenon that would go away once the housing markets stabilized and Millennials started procreating? Or how companies like ESPN routinely claimed that warnings about the trend were an unimportant fiction that should be ignored?

Good times.

While there are still a few sector analysts and executives here and there who'll bizarrely try to downplay one of the biggest trends in TV industry history, the numbers keep making it harder and harder to keep one's head buried a foot below ground. Last year, for example, once again saw one of the highest defection rates of traditional TV subscribers in recent memory. According to Wall Street analysts, the top pay TV providers lost 2.5 million subscribers last year alone:

Ironically the two companies that actually tried to adapt to the cord cutting trend suffered the worst losses. Both AT&T and Dish have launched DirecTV Now and Sling TV, respectively, in a bid to try and at least hoover up a few of these fleeing customers with their own streaming services. That's something to be applauded, especially since huge swaths of the sector have simply responded by doubling down on terrible ideas (from raising rates to fighting against real cable box competition). But even with adaptation, users are still fleeing to other alternatives (Amazon, Hulu, Netflix) instead.

It's not going to be getting any easier for entrenched pay TV providers, especially the ones that stubbornly refuse to compete on price. The streaming market will soon face a new rival in the form of Apple's and Disney's new Disney+ streaming service, which will be the exclusive home of most Star Wars, Marvel, Pixar, and Disney children's' programming:

"The clear implication is that year-over-year subscriber trends for programmers that improved throughout 2018 are set to worsen again in 2019,” Greenfield wrote. The analyst is widely known as bearish on the pay-TV sector, frequently using the hashtag #goodluckbundle in his commentary (as he did in Wednesday’s post). The cord-cutting problem promises to grow even more exacerbated as new subscription-streaming services from Disney (Disney+), WarnerMedia and NBCUniversal hit the market starting later this year. Those will via for consumers’ entertainment dollars against SVOD players like Netflix, Hulu, and Amazon Prime Video."

So if companies like AT&T and Dish are actually trying to adapt to reality, why are they seeing such major departures? Many of these users were on unrealistically cheap discounted promotions intended to drive adoption that ended. And some users were frustrated by the a price hike by AT&T in the wake of its latest megamerger with Time Warner. New streaming companies are also actually good at customer service, something the cable and broadband industry hasn't been able to get a handle on for the better part of a generation.

Between tight margins and an ocean of new arrivals, it's going to be pretty hard for the cable industry to make anywhere near the same profits they were used to during the heyday of cable TV. But that's generally how competition works. And you shouldn't feel too badly for the Comcasts of the world, since their solution will simply be to jack up the cost of broadband, where competition is far weaker. Still, there's a subset of executives who still seem to somehow believe they're owed a permanent position of dominance without having to work for it. That delusion is falling apart more quickly than most of them expected.

Filed Under: cable, cord cutting, over the top, streaming

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  1. identicon
    Anonymous Coward, 22 Feb 2019 @ 10:04am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: yeah but...

    They operate on similar frequencies.

    Cell towers operate in the 900 to 1900 MHz band. Starlink satellites will operate in the 12-18 GHz and 26.5-40 GHz bands. How are those even remotely similar?

    Also they use the same modulation technology, QAM, as does cable and fibre.

    QAM is not a technology, it's a method of modulating digital and analog signals and can be implemented using a variety of different technologies. It is more mathematical than technological. Bad faith argument.

    Any technology difference will be those related to output power, reliability and operating environments

    This is blatantly false or misleading at best.

    A satellite will have a higher data bandwidth than a cell tower because the spectrum division needed for cell towers can be avoided with satellites

    I'm sorry, didn't you just get done saying that there was no difference between a cell tower and a satellite? Now you're saying satellites have a higher bandwidth? Shouldn't be a problem then, now should it, that there are few satellites than cell towers.

    Also, those 5,000 satellites have to serve the whole world, with around half of them over oceans at any one time.

    Yes, and? So what? That's why they operate in a mesh network.

    There will be single digit numbers, to low double digit numbers visible from any spot on earth, serving much larger areas than a cell tower.

    This is true also for other systems like GPS (which by the way, every single smart phone uses GPS) and there are FAR fewer satellites providing GPS service than there would be for Starlink.

    Also you make the FALSE assumption that there would be equivalent amount of client ground stations in the same coverage area as there are cell phone users to cell towers. Cell phones, by nature, require one per person. One cell phone cannot serve multiple people simultaneously. This is not true for satellite ISP service where you only need one ground station to provide internet access to multiple people. Additionally, not everyone is likely to switch over to Starlink so you won't have nearly the same amount of saturation as you do with cell towers.

    And finally, something I have neglected to address until now is that your number of satellites is wrong. Starlink is planning to launch almost 12,000 satellites, more than double your claim of 5,000. In addition to that, the system is expandable, meaning if 12,000 isn't enough, they can launch more to meet demand.

    You are arguing in bad faith, possibly from a position of ignorance, but bad faith nonetheless.

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