Capitalism is Cable Cord-Cut-Throat
In the last few hours, investors have dug up stats showing a relentless cord-cutting epidemic that could crush big media stocks. Cable TV has enjoyed a long and glorious life, but let’s admit it, streaming has taken over! Time for some active stock management?
Once upon a time, television was the disruptor. As an upgrade from radio, cable TV lit up scores of American households. From sporting triumphs to chat show laughs, from ”drop-everything” news flashes to unforgettable dramas, cable connected families to countless magical moments and special memories. However…
As many in the markets are well aware, cable cords are being cut. In this competitive, capitalist world, creative destruction is the name of the game, and according to the boffins at eMarketer, cable TV has already begun saying its farewells. eMarketer is a market intelligence agency whose recent report claimed that 25% of US living rooms will be without a cable TV subscription five years from now.
But chin up, it’s out with the old and in with the new! The same reason for the decline in cable also has investors jousting with their media holdings, and that is streaming! Services like Netflix, Amazon Prime Video, and soon, Disney+, have taken center stage. With the latter announcing a $12.95 per month price point last night, these streamers offer far more content for far less. They’re on the rise, competing for eyeballs as investors pick their streaming winners.
As for big ‘legacy’ media, investors know those companies need to act fast. Many have rolled broadband into their cable subscription offering, safeguarding profits. Bundled deals are very popular, and even charging more for standalone internet usage can help profit margins. So, all is not lost, but if eMarketer is right, life will be very different both in investing circles and at home! Don’t change that channel!