Slashdot Mirror
Continued Cord Cutting Hits the Pay TV Business Hard
An anonymous reader writes: Cord cutting is not a new concern for the pay TV business but a recent massive sell-off in media stocks has many in the industry worried. Cable, satellite and TV companies suffered their worst-ever quarterly subscriber declines losing more than half a million accounts, sending stocks tumbling. Researchers say this may be the beginning of the end for the pay TV business. According to analysts Craig Moffett and Michael Nathanson: "A year ago, the Pay TV sector was shrinking at an annual rate of 0.1 percent. A year later, the rate at which the Pay TV sector is declining has quickened to 0.7 percent year-over-year. That may not seem like a mass exodus, but it is a big change in a short period of time. And the rate of decline is still accelerating."
as soon as they can. They already talked about allowing cable companies to force you to buy TV service in order to get Internet access. For many people, like here in Seattle, cable is the only option for faster than 1.5 Mbps service.
How are Hulu and Netflix doing? Even better, how is HBO doing now that they've made HBO Go available without a cable subscription?
I'm currently paying for both Hulu and Netflix (and also Crunchyroll) and i'm thinking of picking up HBO Go. I have no problem paying for the content i want, it's the hassle of dealing with the cable company plus paying for a lot of crap that i don't want that's the problem.
My big gripe at the moment is SyFy. For the first time since they changed their name to something that sounds like a venereal disease they're producing content that i'm actually interested in. But i can't watch it because even though they're posting it to Hulu they're requiring that you have a cable subscription to view it. I don't know if this is stupidity on their part or some kind of legal tangle they just can't free themselves from, but i _want_ to watch their stuff and i'm willing to pay them, either directly or indirectly, but they just won't let me.
This Space Intentionally Left Blank
Given that I can only watch the stream of Cable TV for as long as I subscribe to cable, I would say that I own them much more so than the product I got from Cable TV. If I decide to stop buying new shows, I can still go back and rewatch the old ones as many times as I want. If I stop paying for cable I can't watch anything.
Sure the authentication server could go down permanently, but at this point i've already watched and rewatched most of the shows multiple times over the last 5 years i've been doing this. I've also spent half as much doing this as I would've spent on cable. And I haven't had to deal with commercials.
So far, I also don't see the sun setting on the iTunes store any time in the foreseeable future. If it did, however, I would expect to see a MUCH bigger outcry over the "purchases" people have done on iTunes disappearing. To the extent that it would actually bring the topic up to mainstream news and actually spark some debate and possible change to the laws about what is required to ensure that you can continue to enjoy your purchases in perpetuity. I would also expect people to work much more diligently about then cracking the iTunes DRM.
Sure the satellite companies suffer when customers quit. They don't sell much in the way of internet to replace those lost TV customers. But cable, now that's another story. Cable actually charges me more for broadband since I do not carry TV package too. In fact my next door neighbor just cancelled Comcast and went to a DSL provider just for the fact she wanted internet only broadband and Comcast told her she had to buy a basic channel package too. I pay for broadband only and have for years! The thing is, Comcast still makes money off broadband and in fact all Comcast really should care about is providing the services they offer. Together as packages or separate. But someone at Comcast is worried your using your broadband to buy other media services and that bugs Comcast.
Well that's too bad, and in fact many people in my area are ditching Comcast completely. I think I could get by with a DSL line providing a good 6mbps download speed. Not the greatest, but $29 vs $68 per month sounds pretty good.
...too expensive. People are voting with their wallets. Time for the time honored appropriate response to a shift in the demand curve where the amount demanded at every price is less: time for price cuts.
Everybody in the industry has gotten fat: producers, actors, athletes, sports leagues, coaches, college athletic programs, on air talent, etc. (I'm mostly interested in ESPN, I almost never watch anything on HBO etc, but the same logic applies). You can't pay billions to televise a single college football conference, raise your prices to astronomical levels to cover same and expect your customers to keep shelling out.
There will be a blood bath, especially in the college sports world. The days of $5mm/year coaches, $1mm/year AD's and $750mm stadiums with lavish locker rooms, indoor training facilities, etc, are going to quickly come to an end.
The NFL will feel the pinch as well.