‘Cutting the cord’ shift continues to hurt cable companies

On August 6, 2015, Posted by , In College Marketing,Industry Trends,Technology, With No Comments

Cutting the cord has been one of the biggest industry topics in 2015 as more people cancel traditional cable subscriptions and opt for a la carte options from subscription services like Netflix, Hulu, Amazon Prime and Sling TV.

Watching television has been a staple in living rooms for decades. That visual may remain in the coming years, but the business behind the act of watching TV will be much different.

Younger-viewing audiences lead the shift as Millennials adopt Smart TVs and mobile TV on-demand apps. Millennials and older Gen Z’s watch the most streaming video. They are reshaping the future of TV with the thought, “I’ll watch what I want, when and where I want to watch it.”

Disney’s stock fell 9 percent this week as a result of ongoing subscriber losses at its flagship ESPN sports network. Other companies reported big share drops we well including Time Warner at 9 percent, Discovery Communications at 12.1 percent Viacom at 7.5 percent, and CBS at 4.6 percent.

The shift is hurting cable companies and networks right now, but overtime could even out or even become more profitable.

According to a recent article by The Associated Press, since the digital subscription audiences are younger – and therefore more valuable – cable companies and networks are actually getting paid more for each subscriber than through traditional distributors and cable packages. Over time, as subscribers increase, the shift could become more profitable.

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