Streaming Killed The Cable Bundle: Record 941,000 Pay-TV Customers Ditch Cable In Q2

Back in the ancient days, long before Al Gore had even invented the internet, the Buggles declared once and for all that "Video Killed the Radio Star."  Now it seems that a remake of that classic MTV hit is in order as, with each passing quarter, it's becoming increasingly clear that streaming has officially killed the cable bundle.  

We've long held the opinion that the content creation and media distribution businesses are on the precipice of a major transformation.  Since the birth of cable TV, content creators (think Disney, Discovery, Scripps, AMC, etc.) have been locked in a perpetual tug-of-war with distribution companies (Comcast, Charter, Verizon, AT&T, etc.).  Up until now, content creators have been the clear winners as they've continued to force cable companies to carry their growing lineup of channels, many of which are awful, by effectively holding their good content hostage until distributors agree to pay for channels that they (and their customers) likely don't want.  As an example, a company like Scripps may refuse to sign a distribution agreement with Charter for HGTV or the Food Network, unless they also agree to pay for their less popular channels like TVN, Fine Living or the Asian Food Channel.

All of which is precisely why cable customers have ended up paying for 1,000 channels when they really only watch about 5 of them.

But, that is all changing with the onset of direct-to-customer streaming.  HBO was the first to blink, then came ShowTime and now Disney has just announced that ESPN will also go direct.  What this means, of course, is that increasingly people will be able to make a la carte purchases of the media they actually value and ditch all the 'crap' that clever content creators have forced down our throats for years by holding their desired content hostage. 

In summary, streaming killed the cable bundle.

All of which is precisely why, as Fast Company and MoffettNathanson report, pay-TV customers are ditching cable bundles in record numbers with nearly 1 million customers throwing in the towel in Q2 2017 alone.

The country’s top cable and satellite TV providers just wrapped up another quarter of record subscriber declines as customers flee traditional pay-television distributors in favor of streaming and on-demand services, according to a research note from MoffettNathanson. Combined declines for the second quarter of 2017 came close to a million subscribers, the firm estimates, with Dish Network, DirectTV, and AT&T hit especially hard. As bad as it was, the customer exodus was not as bad as some analysts had predicted, prompting analyst Craig Moffett to ask the question, “Is ‘not as worse’ even a thing?”

 

“[Y]es, things are getting worse,” Moffett wrote. “But at least in Q2 they got worse more slowly. Less worse. Or, not as worse. Or, well, you get the idea.”

 

If all this sounds familiar, it’s because three months ago, the industry had just logged its worst quarter in history, losing an estimated 762,000 pay-TV subscribers. This time around, that number has jumped to 941,000 subscribers. Even Comcast, which had been bucking the trend over the last few quarters, ended Q2 with a net loss of 34,000 pay-TV customers.

 

Of course, if you're going to stream all of your media content online then you need a good internet connection which is at least partially why the satellite and DSL providers (Dish, DTV, AT&T) are bleeding customers way faster than the cable companies that deliver much faster internet speeds.

 

Perhaps it's time for a remake?

Comments

Blue Steel 309 Wed, 08/09/2017 - 19:26 Permalink

TV is literally bad for your mind, regardless of the content. The content just makes it even more damaging. It is called TV "programming", because that is what it is doing to your mind.

LindseyNarrate… (not verified) Blue Steel 309 Wed, 08/09/2017 - 19:35 Permalink

You are, for the most part, correct, Mr. Steel, and I will raise-you-the-following: "Hollywood" actually denotes a magical-wand, which was, generally, made from the branch of a holly tree, because it was thought to possess the most power, of all wood.  When people, back-in-the-day, would talk about "the magic of Hollywood", they were talking about its literal power over-the-minds and -of-the-character, of people viewing the propaganda produced, and that situation has not only not improved, since, then, but is far, far worse, than at any other point-in-time. Lindsey NB:  Once one is intellectually-honest-enough to admit (((who))) controls Hollyweird, and how (((their))) ABSOLUTE control over one of the most powerful organs-of-propaganda ever devised is used to control and manipulate a very large number of people, then the answer as to how we all got-to-this-point becomes so much easier to understand.

In reply to by Blue Steel 309

Deplorable Wed, 08/09/2017 - 19:30 Permalink

Getting ready to pull the plug with one kid graduating and moving out and the other one following suit in a year.Now I have to get my wife to give up HGTV and those damn home remodeling shows.

chosen (not verified) jackstraw001 Wed, 08/09/2017 - 20:11 Permalink

I had Sling and liked it.  But I switched to Directv Now with a gazillion channels for $35 a month (no longer offered).  Directv Now still has bugs, but it authorizes apps that are virtually bug-free.  I miss the El Rey channel though, which is on Sling tv.  I dropped Netflix.  It's movie selection has gone to hell.

In reply to by jackstraw001

Bigly jackstraw001 Wed, 08/09/2017 - 22:12 Permalink

Comcast triple play is $99/mo. No contract.I (a dinosaur) still have my landline. When at&t sold out to frontier the call quality was drastically worse (loud hum that they could not seem to fix). So I called the antichrist company re: phone.If i elim tv and keep phone and internet it is more than $99. THAT makes no sense, but whatever.I have a digital antenna ready to mount when I finally elim my landline.I do need high speed internet. Comcast has a monopoly at my location.

In reply to by jackstraw001

kbohip Deplorable Wed, 08/09/2017 - 20:54 Permalink

What is it with women and watching houses get remodeled anyway?  The best part is when my wife watches the knuckleheads do some back breaking long project like redoing a concrete driveway and casually mentions that "we" could do that.  Right, I'll operate the jackhammer while you operate the Kindle and the wine glass.

In reply to by Deplorable

LindseyNarrate… (not verified) Wed, 08/09/2017 - 19:28 Permalink

Ladies and Gentlemen, LITERALLY every teLIEvision-series, and a VERY large number of motion-picture productions, are freely-available, on a number of sites, found on the internet, so there is no reason for ANYONE to pay for cable- or satellite-services, as long as one has access to high-speed-internet. Lindsey

NoWayJose Wed, 08/09/2017 - 19:31 Permalink

Some of the streaming guys need to be careful - a few of those (mostly free ones) are loading up with repetitive commercials. Sometimes their 'content' is nearly unwatchable. There will be a tendency to go to these streaming commercials for revenue - but they may drive customers to other entertainment.

Honey-Badger (not verified) Wed, 08/09/2017 - 19:31 Permalink

TV Bundle providers can fuck off and die, install kodi on a spare PC or just use primewire.ag with ad block and never suffer through a commercial ever again.

The Cooler King (not verified) Wed, 08/09/2017 - 19:36 Permalink

Actually, it's kind of funny to read a bunch of comments that basically say: Fuck TV! (but then go on to say how you can watch TV programming, for free, on your internet). It takes little to amuse me sometimes.

az_patriot (not verified) Wed, 08/09/2017 - 19:38 Permalink

This is why the cable companies are starting to impose ridiculous "data caps" on their customers.  The data caps are punishment for cutting the cord and streaming.

allgoodmen Wed, 08/09/2017 - 19:39 Permalink

Let's see... 541 channels

200 are straight up marketing (QVC etc)
2 channels selling something to fix up "creepy skin" - 24 hrs

100 Mexican channels I don't watch (except every 4 years soccer matches)

A dozen 24hrs Liberal news channels

100 locked out channels that I don't pay the monthly for

100 more pay per view channels that are so locked out, if I stop while scrolling thru them the cable box locks up

2 or 3 channels I do watch

Starting to think this is a bad deal

DC Beastie Boy Wed, 08/09/2017 - 19:53 Permalink

Only two words come to mind, FUCK COMCAST

We got rid of that shit years ago and got a digital antenna and ran it to the top of the attic. No we get 100 free chanels from NY to VA, all free.

We've converted over 50+ people over to the free digital antenna

rlouis Wed, 08/09/2017 - 20:07 Permalink

So T paid 67 billion for DirecTV in 2014, they've ... maybe... recouped 18 billion gross and subs are fleeing. And another big merger going swimmingly fine, so it's time to swallow another so that revenues don't show a drastic multi-year decline, like Sears, P&G, KO, or MCD.

ToSoft4Truth Wed, 08/09/2017 - 20:08 Permalink

Cable TV is obsolete.  They must change their model to charging $1.00 monthly per channel "à la carte".   And perhaps $2.00  for the premiums....  

AKKadian Wed, 08/09/2017 - 20:44 Permalink

I got a TV antenna With an amplifier, get 39 channels free and internet, plus a ham radio. The antenna is in the top of a 60ft tree, 10ft above the tree top. I press a button to turn the antenna pole and on clear nights get TV signals from two different states. The weird thing don't watch much TV even being it's free. Who is interested in propaganda.!!!

Bobportlandor Wed, 08/09/2017 - 20:44 Permalink

Heres another problemTV actors have the same daily and weekly rate minimums as motion picture actors, but the rates for TV actors can get complicated based on the role and whether the show is a half-hour or one-hour long. Actors playing a major role in a half-hour show have a minimum five-day rate of $4,631. Actors playing a major role on a one-hour show have a minimum eight-day rate of $7,410. Actors on a half-hour show who are guaranteed 13 or more weeks have a minimum rate of $2,921 per week. The rate for less than 13 weeks but more than 6 weeks is $3,343 per week, and the rate for a guaranteed six weeks of work is $3,898 per week. Cut this down to 15-25 per hour between May of 2011 and May of 2012 were Tom Cruise ($75 million), Leonardo DiCaprio ($37 million) and Adam Sandler ($37 million). The highest-paid actresses were Kristen Stewart ($34.5 million), Cameron Diaz ($34 million) and Sandra Bullock ($25million Lets get those numbers down to 50 an hour

motoXdude Wed, 08/09/2017 - 20:48 Permalink

Oh you silly peasants:   Dont you know that Cable is your Lifeline should your mansion sink?   Cable TV forever (I just need good grip gloves to grip)!  Try grabbing your digital WIFI or whatever and see how long you stay dry!   I can't afford to mess-up my hair as it cost $60 at Gene's Beauty Trailer last week... I'm no fool! 

rent slave Wed, 08/09/2017 - 20:49 Permalink

What is going to kill local governments?in NJ,even one horse towns have a fire and police dept plus a school board.The little red schoolhouse is putting everyone in the red.