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, 21 Feb 2019 @ 10:30am

    Re: Joke's On Them

    I remember the student loan days and working at my crappy job making $3.35 an hour. This is how it is early on in life. You start on the bottom and work yourself UP over the years.

    I got my first house about 6 years ago because House prices were insane before the bubble burst. Before that, I was living in a Mobile Home. I wasn't dumb enough to knock someone up at a young age. Then you get into that trap.

    I know where I work, it's not easy trying to get new workers. Other than those at the bottom of the barrow we really don't want. it's hard to hold onto workers as it is a Workers market. There is in fact jobs all over the place. Unemployment numbers are NOT falsely Inflated.

    Child care is not cheap. Never has been and never will be. In fact, kids, in general, are very expensive overall.

    I'm not sure why young people these days think they can just get out of college and make a big fat paycheck and start working at the top. You have to put in your time. On the job training/learning, in general, is more useful than a lot of stuff you went to college for.

    I cut the cord about 10 years ago. I got tired of the $180 cable bill every month and it was only ME at the time. I couldn't watch enough TV and be on the internet to justify the price. First thing I did when I got my house and mount up a large antenna up on the roof. I look around the neighborhood at all the other houses and not an antenna in site and I think "SUCKERS". I had Netflix and Amazon Prime before I cut the cord. Before Amazon even offered free movies and TV. So I don't consider them an extra cost. I don't have enough time to watch what I have as it is. Why do I need another 100 channels I have no time to watch?

    As they say, what you can't watch you can't miss. The biggest savings is making sure you own your own cable modem which saves you monthly rental fee's and call every year to get onto some new package to save money. I call every year and just doing that, I generally save at least $40 a month. When your year is up, they jack up the prices. So you call, get onto a new deal and save money for another year.

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