Cable TV Execs Move Past Denial Stage, Now Fully Expect A 'Cord Cutting' Bloodbath

from the you-made-this dept

For the better part of the last decade, cable and broadcast executives tried their hardest to pretend that their industry wasn't facing a massive tectonic shift. First, they tried to insist that users flocking from expensive bloated cable bundles to streaming or over the air broadcasts didn't actually exist. Then, when it became very clear cord cutting was a major trend, they tried to pretend it was just something irrelevant, poor nobodies did. Then, when evidence made it very clear that wasn't true either, many executives pretended they'd seen this coming all along.

They didn't see it coming. In fact they routinely doubled down on all the kinds of behaviors that created the problem in the first place, like mindless rate hikes, bullshit fees, cheaping out on customer service, and fixating on megamergers instead of customer welfare. But after 2019 and 2020 wound up being the bloodiest years on record for cord cutting, they sure as hell see it now.

Case in point: industry insiders now expect 25 million U.S. households to cancel their pay-TV service over the next five years. That's on top of the 25 million homes that have already cut the cord since 2012. The hope now is that the trend stabilizes somewhere around the 50 million traditional TV subscriber mark. Granted there's no evidence they'll be right about this either, and either way there are some hard times in store for the sector all the same:

"At least three major media companies now expect pay-TV subscriptions to stabilize around 50 million, according to people familiar with the matter, who declined to speak on the record because their company plans are private.

The projected decline in subscribers will mean a drop of about $25 billion in cable subscription revenue plus associated advertising losses for the largest U.S. media companies, including Disney, Comcast’s NBCUniversal, AT&T’s WarnerMedia, ViacomCBS, Fox, Discovery, Sinclair and AMC Networks."

Facing the one-two punch of this massive paradigm shift and the COVID crisis (which has made consumers even more sensitive to relentless cable TV price hikes), Disney just completely retooled its business operations to focus exclusively on streaming.

Traditional TV/telecom executives, which, from experience, tend to surround themselves with more yes men, have had a harder time adjusting. Charter (Spectrum) CEO Tom Rutledge, for example, spent much of last year insisting that cord cutting would slow down this year as his company doubled down on relentless bi-annual consumer price hikes. His predictions were... unsound.

Of course just because people are flocking to streaming doesn't mean that new sector problems won't rise to replace the old ones. Giants like AT&T, Verizon, Comcast, Charter, and others will simply exploit their broadband monopolies to recoup any lost TV revenue by jacking up the cost of broadband. And as hardware vendors, broadcasters, telecoms, and other companies all begin to elbow each other on their mad dash to the streaming trough, new, yet somehow familiar gatekeeper warfare problems will arise. Still, with streaming offering more flexible options, lower costs, and better customer service, it's hard not to think the increased competition won't be a net positive once the dust starts to finally settle.

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Filed Under: cord cutting


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  • identicon
    Anonymous Coward, 30 Oct 2020 @ 10:14am

    Giants like AT&T, Verizon, Comcast, Charter, and others will simply exploit their broadband monopolies to recoup any lost TV revenue by jacking up the cost of broadband.

    All the more reason to enable community broadband to replace corporate cable where costs are sky high due to executive overhead and content production costs.

    In the long run all of this may result in less content being created (by the cable companies and their holdings) but in the longer run that will only encourage smaller content creators to step up to fill the void.

    reply to this | link to this | view in chronology ]

    • icon
      ECA (profile), 30 Oct 2020 @ 1:46pm

      Re:

      There REALLY isnt a loss to perpetual goods, Except the purpose to USE it in every way possible.

      The biggest problem, tends to be Greed on top, and the idiocy in HOW things are created or built.
      These are NOT the builders of the 3 generations ago. These are the Bill collectors. They dont even know how much Any of this costs, from their OWN goods to the re-building of a Lunch room for the workers.

      reply to this | link to this | view in chronology ]

    • icon
      nerdrage (profile), 1 Nov 2020 @ 10:24am

      Re: don't worry about content

      There's already more content than any sane person can consume being made by companies not on your list. Netflix, Amazon, Apple, Disney, ViacomCBS etc.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 1 Nov 2020 @ 11:58am

      Re: SandyNet

      This is the price list from SandyNet, South East of Portland, It is self-sufficient from its fees.

      SandyNet is Your Community, Connected

      We're your local Internet Service Provider that is owned and operated by the people of Sandy as a public utility. As a non-profit utility, we are determined to providing fast, reliable and affordable Internet service. We believe that what your Internet experience should not be restricted by cost, bandwidth or customer support. That is why we offer the cheapest price per megabit within city limits.

      For fiber optic customers, we offer 300Mbps for $41.95 a month For fiber optic customers, we offer 1000Mbps (Gigabit) for $59.95 a month

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 30 Oct 2020 @ 10:50am

    Like so many corporations, cable has over valued it's product, believing that it's services are so fundamental to first world values that it is inconceivable that anyone would do without their product, no matter the price.

    As usual, there comes that moment of epiphany, far too late to save their product in the volume of use it once held.

    Quality in broadcasting, services, programming, have all taken a hit over the years as the lowest common denominator became the high bar to reach.

    The use of continual 'reality shows' that were anything but reality, the practice of repeated replays of the same program over and over, and the continual jacking of prices where it cost ever more to keep the service, and the bundle package you must take to get that one channel you wish, have all contributed to cable's downfall.

    Personally I could care less. I cut the cord probably 20 years ago. I've never looked back nor desired to ever have cable again. When you can't find things you are interested in watching, why pay?

    Personally

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 30 Oct 2020 @ 12:15pm

    Pay television just isn't a good value for the money. I have Internet, Netflix, Amazon Prime, and an antenna. My Steam library provides another means of entertainment. I have a Fire Tablet for a reading library. There just isn't a place for cable tv in my setup.

    reply to this | link to this | view in chronology ]

    • icon
      ECA (profile), 30 Oct 2020 @ 3:06pm

      Re:

      Cable Sat dont supply the:
      What I want to watch,
      WHEN I want to watch/read/play.

      The FCC(until recently) was ASKING/suggesting/demanding the Cable/sat to do better with ala carte, Choose what you want programming.
      Insted of 20 religious channels, insted of 16 sports channels, Insted of NATIONAL sports picking international, was NOT a choice, Insted of NEWS, insted of ALL the crap, you didnt want.. Packages that YOU SELECTED.
      Even if it was LOCAL only for $20, ALL the local, no the few that PAID them.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 30 Oct 2020 @ 7:14pm

        Re: Re:

        The FCC(until recently) was ASKING/suggesting/demanding the Cable/sat to do better with ala carte

        A-la-carte is a sideshow, like rearranging the deck chairs on the Titanic. A bunch of old lawmakers and old cable execs arguing about minor tweaks to a service that the younger generations already consider obsolete. Programming grouped into channels by other people, scheduled by other people—people that grew up watching web videos will never find this tolerable. Cable companies will never be seen as anything more than ISPs by these people.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 1 Nov 2020 @ 11:59am

        Re: Re: Local Channels

        It costs $5 to add local channels to DirecTV. I want to pay $5/month to get only local channels from the cable company.

        reply to this | link to this | view in chronology ]

  • identicon
    Annonymouse, 30 Oct 2020 @ 12:25pm

    Don't forget the shoehorning in of more and more obnoxious ads while compressing, overwriting, chopping up and snipping of actual content.
    Pay tv used to be shows movies etc without ads but since the rebroadcast ota signals had ads that they could overwrite the ad revenue inspired them to do the same to everything else.
    Rare is the ad free channel like tvo which would pillory the cablecos if they did insert ads.

    reply to this | link to this | view in chronology ]

    • icon
      Mononymous Tim (profile), 30 Oct 2020 @ 1:41pm

      Re:

      Yup, the bait & switch was that "there were no ads because you're paying for the channels".

      The cablecos have gone back on almost every one of their words from day one.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 30 Oct 2020 @ 7:03pm

        Re: Re:

        Yup, the bait & switch was that "there were no ads because you're paying for the channels".

        Please back up this statement with some evidence. People bring it up all the time, and I find it difficult to believe. The beginning of cable TV was "community antenna television" (CATV), literally a big antenna or set of antennas so people could get broadcast TV despite bad terrain or an aversion to giant antennas on their own properties. The signals were unchanged from the broadcast versions. Ad-free "cable channels" (i.e. premium channels) weren't popular till perhaps the 90s.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 31 Oct 2020 @ 3:46am

          Re: Re: Re:

          Flash back to the early 80s when cable tv was analog and cost twenty five some dollars a month giving you twenty to thirty channels ... something like that. There were no advertisements on the premium channels like HBO. This was a big selling point whether they advertised it or not. I do not think anyone is claiming over the air content was being stripped of ads for use in cable tv.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 1 Nov 2020 @ 2:31pm

            Re: Re: Re: Re:

            Flash back to the early 80s when cable tv was analog and cost twenty five some dollars a month giving you twenty to thirty channels ... something like that. There were no advertisements on the premium channels like HBO.

            Maybe your experience differed from my own, but we sure as hell didn't get "premium channels like HBO" with the basic 25-dollar-per-month package during the '80s. Such channels were always more rumor than reality—we'd heard of them, but who could afford them? Outside of the occasional "preview week", we never saw anything more "premium" than the weather channel and TV guide channel.

            The Simpsons had the same view in 1990:
            "[Kang] It is our great pleasure to provide you with unlimited entertainment on your intergalactic journey. On this cable system, we receive over one million channels from the furthest reaches of the galaxy.
            [Bart] Do you get HBO?
            [Kang] No, that would cost extra." (The Simpsons, Treehouse of Horror, Oct. 25 1990)
            Wikipedia says HBO cost extra even in the '70s: $6.50/month, just for that one channel.

            reply to this | link to this | view in chronology ]

        • icon
          ECA (profile), 31 Oct 2020 @ 3:35pm

          Re: Re: Re:

          Originally,
          Cable WANTED to be advert free, but the corps said NOPE we wont deal with you if you dont allow our Adverts.
          Understand something here. ALL the groups we are talking about here were LOCALLY broadcast, most of the adverts WOULD NOT be local.
          Cable Buckled under So that they could get things going. Cable wanted most of the system FREE to everyone, but ended up PAYING to get content running. Which then went to the Customers to pay.
          But we got Channels we didnt have, and SHOWS we didnt get, esp in the Rural areas, where religion and Allot of restrictions WERE on TV for the area.
          Even NOW, Some shows arent seen in certain areas. Blocked bypassed, what ever.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 1 Nov 2020 @ 2:17pm

            Re: Re: Re: Re:

            Originally, Cable WANTED to be advert free, but the corps said NOPE we wont deal with you if you dont allow our Adverts.

            That doesn't make a lot of sense. Cable didn't have or want a deal with the networks at first, till the networks sued over copyright. How would cable companies then expect to get ad-free versions of those? If you've ever been to a TV show taping, you'll know that the audience actually sits around and waits during the "commercial breaks" (during which time no commercials are available, it being potentially months before the show airs). The whole setup is ad-oriented, and networks probably never had tapes that just run the full 22/44 minutes straight.

            As for cable-only channels, those could always be ad-free, and many were, but such channels were "extras" in those days—not major reasons to subscribe. Popular shows were expected to air on major broadcast networks.

            reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 30 Oct 2020 @ 6:57pm

      Re:

      Pay tv used to be shows movies etc without ads

      Techdirt uses the term "pay TV" more liberally than we did in the 1980s. Back then, it didn't refer to cable in general, but to premium cable-only channels. Most cable subscribers didn't have "pay TV" till the 1990s; only broadcast TV, sent over a wire.

      reply to this | link to this | view in chronology ]

  • icon
    Code Monkey (profile), 30 Oct 2020 @ 12:56pm

    Bloodbath to come...

    Gotta agree with Anonymous Coward on this one. (Although I use a Kindle for books)

    Just chilling on the couch, with a big bowl of popcorn, watching the cable companies implode.... LOL

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 30 Oct 2020 @ 1:04pm

    Friday deep thoughts

    We're currently in a situation where "cord cutters" are still paying the same ISP/cable company slightly less after dropping cable --in addition to-- paying one (or more) streaming companies for tv/movie content. Netflix keeps raising their prices and ISP's/cable companies keep raising their prices. These are shallow victories and shallow savings if both the ISPs and the streaming companies are both continuing to raise prices.
    I'd rather we have several ISPs/cable companies in every (or most US cities) to choose from because I imagine (hope, dream, suppose that) this would result in sustained, 'competition induced', lower internet access/cable tv prices.

    I could be fever dreaming though, and I have absolutely no blueprint to bring said competition into existence. Does Anyone?...

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 30 Oct 2020 @ 1:21pm

      Re: Friday deep thoughts

      To bring in competition at the ISP level, you need to do what most of Europe has done, make the Infra-structure a regulated utility open to any ISP.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 30 Oct 2020 @ 1:45pm

        Re: Re: Friday deep thoughts

        Well, if true, hopefully that's what happens next here in the U$. The voters would have to demand it though. Our government (politicians) won't automatically take the initiative to do what's best for the tax payers.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 30 Oct 2020 @ 2:15pm

          Re: Re: Re: Friday deep thoughts

          The problem in the US is any attempt to do that will be met with the cries that it is socialism, and the very people whose lives it would improve will call for it to be voted down..

          reply to this | link to this | view in chronology ]

          • icon
            Stephen T. Stone (profile), 30 Oct 2020 @ 3:17pm

            And that’s before we get into how the existing telecom monopolies will do everything in their power to stop community broadband from becoming a thing.

            …which, technically, is no different than what’s happening right now, but still.

            reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 30 Oct 2020 @ 6:52pm

              Re:

              And that’s before we get into how the existing telecom monopolies will do everything in their power to stop community broadband from becoming a thing.

              Except they've let their service become so awful that these anti-community-broadband efforts are starting to fail, even in areas where they'd have been expected to succeed based on partisanship.

              reply to this | link to this | view in chronology ]

  • identicon
    Bobvious, 30 Oct 2020 @ 5:26pm

    A giant Ponzi scheme

    currently experiencing Richter-fication, and it's slowly collapsing. Meanwhile all those still trapped in it are being forced to bear more of the load as other peel out.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 30 Oct 2020 @ 6:55pm

    Translation:

    The cable executives have enough preparations to ensure they'll wait out the apocalypse of their own making, while leaving their subordinates to go down with the ship while cleaning up the mess the top 1% made.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Oct 2020 @ 3:50am

    TV executives get paid a high salary because they have the talent and know how needed to get the job done ... or at least that is what we are told.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Oct 2020 @ 11:49am

    Actual subscribers are WAY WAY WAY WAY below 50 million already.

    the big networks are using government subsidies to prop up their business, and are bare-faced lying about subscriber numbers to keep share prices up and executive bonuses flowing.

    It's a total clusterfuck AND major violation of SEC rules.

    Wait til the SEC finds out how network execs are dumping their shares KNOWING their companies are essentially in freefall.

    reply to this | link to this | view in chronology ]

  • identicon
    Elijah, 1 Nov 2020 @ 7:17am

    Don’t forget, these companies also supply your internet

    This won’t really impact these companies at all, you will see a rise in you’re HSD cost as TV and landline subscriber numbers drop. You have to understand that these companies own billions of dollars worth of the infrastructure required to provide internet to the masses. To think that you are going against the cable companies by switching to streaming in moronic. They already charge streaming services more to broadcast on their network. Nothing will actually change other than the services that they offer.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 1 Nov 2020 @ 8:36am

    Print to small.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 1 Nov 2020 @ 11:24am

    The problem with cable companies

    Cox released a letter in 2017, saying they were going to start cable caps. This would only affect 2% of the users.

    Three years in, they offer 1 data cap for all speeds, and have add-on plans of 500G addition for $30/month, and unlimited for $50/month.

    1. Data caps should increase with download speed. If a 50mpbs second gets 1.25 TB, a 1000 mbps plan should get 25 TB per month.

    2. Cox needs a dynamic cap to keep the affected population at 2%, as was their original intent.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 1 Nov 2020 @ 2:34pm

      Re: The problem with cable companies

      Data caps should increase with download speed.

      Why? How does that help the cable company with their goal of milking the customers (this being the only purpose supported by evidence)?

      Cox needs a dynamic cap to keep the affected population at 2%, as was their original intent.

      Their stated intent. Did you really think it was their actual intent?

      reply to this | link to this | view in chronology ]

  • identicon
    Agent Provacateur, 2 Nov 2020 @ 8:42am

    In socialist USA, where is the money to come from for cable TV?

    Under Biden/Harris socialist USA, all assets of the incorrect people are to be converted to cash and divided, along with their income, to the population as a whole. Therefore, who will have the spare disposable income to pay for cable TV?

    If people can receive the exact same benefits whether working or sitting idle, how many people will go to work, and how many fewer will actually perform useful work to make the TV content and support the infrastructure of cable TV?

    If (some) people are smart enough to design, build and maintain cable TV as well as produce content, is it credible that those people are simultaneously stupid enough to be duped by an "education" campaign to persuade them to work when others receive the same benefits while sitting idle?

    Nope, even in their worst nightmares, the cable TV industry hasn't begun to see the level of the blood bath coming!

    reply to this | link to this | view in chronology ]

    • icon
      Samuel Abram (profile), 2 Nov 2020 @ 9:56am

      Re: In socialist USA, where is the money to come from for cable

      Under Biden/Harris socialist USA, all assets of the incorrect people are to be converted to cash and divided, along with their income, to the population as a whole. Therefore, who will have the spare disposable income to pay for cable TV?

      You think that Joe Biden is a socialist? Wasn't that supposed to be Bernie Sanders, who lost? You're high as a kite with the brains of one, too.

      If people can receive the exact same benefits whether working or sitting idle, how many people will go to work, and how many fewer will actually perform useful work to make the TV content and support the infrastructure of cable TV?

      If (some) people are smart enough to design, build and maintain cable TV as well as produce content, is it credible that those people are simultaneously stupid enough to be duped by an "education" campaign to persuade them to work when others receive the same benefits while sitting idle?

      Um, I receive Government Assistance in the form of Social Security and Medicaid (which I don't want to lose!), and I receive a paycheck from testing games (best job I ever had!). Receiving government assistance doesn't necessarily mean you're not working for a living.

      Seriously, you're out of touch with reality.

      reply to this | link to this | view in chronology ]

    • identicon
      teka, 2 Nov 2020 @ 11:53am

      Re: In socialist USA, where is the money to come from for cable

      Marked comedy, because I have to believe that anyone who can align their neckstump to the glowing screen and mash their pseudopods on the button-board would prove to be too smart to regurgitate that kind of word-mush from any kind of belief.

      reply to this | link to this | view in chronology ]

  • identicon
    Steve C., 23 Nov 2020 @ 9:47am

    The Difference

    The difference is that cord-cutters have choices.

    The mega-media cartel is hoping to recoup their losses through Live TV, but that is an illusion. They need to come down to reality. Half of cord-cutters don't subscribe to any Live TV service - that revenue is mostly gone. Their on-demand dance cards are mostly full.

    As to Internet, cord-cutters need to game the gamers, and take advantage of any chink in their armor. Swap accounts, take a 90-day DSL-sabbatical every two years to get a new two-year deal, or learn to make do with less (you can stream on less than 15 Mbps).

    reply to this | link to this | view in chronology ]


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