TV flickers as viewers find new screens

What are you waiting for? Your time has come to create something entirely amazing, unique and authentic... So, if you need help making it happen grab me and bring me into help you do right!

Record numbers of Americans are unplugging their subscriptions

Financilal Times - David Crow and Shannon Bond  - When 24m US viewers tuned in to watch Donald Trump slug it out with his rivals for the Republican presidential nomination, Fox News made television history, recording record ratings for a non-sports cable broadcast.

However, those who followed the political jousting on social networks had a common complaint: despite partnering with Facebook to host the debate, Fox News had made it virtually impossible to watch the event online.

Twitter users traded links with illicit livestreams and lambasted the network’s failure to cater for “cord-cutters” or “cord-nevers” — people who have either ditched their pay-TV subscription or have never signed up for one.

The disconnect between the knockout ratings and the incredulity of young, media-savvy viewers appeared to support the central thesis of broadcasters and pay-TV providers: cord-cutting might be fashionable for trendy elites, but it has yet to make a dent in “real” America’s love affair with television.

That theory is coming under attack like never before. The second quarter is always tough for the pay-TV industry, as families move home and college students disconnect, but this time it was the worst on record for net customer losses: an estimated 566,000 people cut the cord. With the exception of Verizon, which is still rolling out its video service, all pay-TV companies lost subscribers during the quarter.

Worse still, the poor performance comes against the backdrop of improving macro trends that are usually positive for the industry, including a rise in new household formation following several years of stagnation.

With roughly 100m US pay-TV subscribers, the loss of half a million customers does not equal Armageddon. The subscriber base shrunk 0.7 per cent year-on-year in the second quarter, its sharpest contraction on record, but nowhere near as precipitous as the declines seen in other media businesses such as newspapers and recorded music.

But after a decade of fretting about cord-cutting, investors think it has finally arrived.

Concerns over younger customers’ changing viewing habits led to a sharp sell-off in media stocks earlier this month. More than $50bn was wiped from the market value of the S&P 500 Media Index, after Walt Disney cut growth estimates for its cable networks and companies including Viacom, Fox and CBS reported declining advertising revenue.

Among the companies who pipe pay-TV into customers’ homes, satellite groups have emerged as the biggest casualties of cord-cutting. These groups amassed a huge subscriber base when they entered the market in the 1990s, with deep discounts to cable products and technology that could reach rural homes — but now the disrupters are being disrupted.

Unlike cable operators, satellite companies cannot offer a high-speed broadband connection — an essential for anyone wanting to watch streaming services like Netflix or Hulu.

“We are witnessing the rapid erosion of satellite’s competitiveness,” says Craig Moffett, an analyst at Moffett Nathanson. “The industry is no longer growing in the US and the dynamics have shifted in favour of cable, and in favour of broadband.”

Analysts estimate Dish, one of the two big US satellite groups, lost 151,000 subscribers in the second quarter, versus a loss of 44,000 a year ago. It reported narrower net customer losses of 85,000, but that figure lumped in sales of Sling TV — a new slimmed-down streaming TV service for cord-cutters that is delivered via an internet connection or “over-the-top”.

Charlie Ergen, Dish chief executive, has said he expects its pay-TV business to come under pressure, and has tried to diversify by launching Sling TV and by acquiring tens of billions of dollars of spectrum — the airwaves needed to deliver wireless telecoms services.

Never one to shy away from rubbing salt into the wounds of struggling broadcasters, Mr Ergen had a sharp message for content owners earlier this month: “The biggest problem in the linear [TV] business today is that viewership is going down. Advertising rates are going down. And everybody wants to go to the street and say they’re still making the same amount of money.”

DirecTV, the satellite group recently acquired by AT&T for $49bn, also had its worst quarter ever, posting net customer losses of 133,000, versus 34,000 in the same period of 2014. Investors in AT&T appear to be nervous about the prospects for the new company, sending its shares down as much as 3 per cent on Wednesday after an analyst day where executives outlined their long-term strategy.

For cable operators, the picture is much better. As owner of NBC, the broadcaster, Comcast got burnt in the recent media sell-off, but its cable subscription business performed quite well, shedding 69,000 subscribers versus a loss of 144,000 a year ago. Time Warner Cable lost 43,000, compared with a loss of 147,000 in the second quarter of 2014.

https://www.ft.com/cms/s/2/e6c79d46-4104-11e5-9abe-5b335da3a90e.html#axzz3iu9aNd6k