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Continued Cord Cutting Hits the Pay TV Business Hard 319

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."
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Continued Cord Cutting Hits the Pay TV Business Hard

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  • by Calydor ( 739835 ) on Monday August 10, 2015 @04:48PM (#50287793)

    To quote Blizzard's management when WoW lost three million subscribers in a single quarter: "Don't worry, it's cyclical."

    • To quote Blizzard's management when WoW lost three million subscribers in a single quarter: "Don't worry, it's cyclical."

      That reminded me of a scene in "This Is Spinal Tap", when the manager, Ian, told the band that their Boston gig was cancelled - "I wouldn't worry about it though, it's not a big college town."
    • "Don't worry, it's cyclical."

      In this case, I think it actually is cyclical. When the current cycle of forcing consumers to pay for 50 channels they don't want for each one that they do want ends, then there will be a new cycle of cable TV subscription increases.

      This isn't the death of pay TV, it's just the death of forcing people to pay for TV content they don't want. Let me buy just my top five favorite channels for $5-10 a month, and I'll sign up in a heartbeat. Until then, the cord remains clipped.

      • by torkus ( 1133985 )

        Or rather...let me buy my *content* in a convenient way.

        Netflix streaming was great until they started removing lots of movies.

        Now the providers are fracturing the content between multiple services ... so you do kind of get the ala carte except you have to buy from a half dozen places. Oh, and fight with wonky interfaces that differ between them all. And you generally can't watch offline. And...so on.

        Or just torrent whatever you want for free of course. I killed off cable TV ~5 years ago and still don't

  • by Daetrin ( 576516 ) on Monday August 10, 2015 @04:51PM (#50287831)
    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.
    • How are Hulu and Netflix doing? Even better, how is HBO doing now that they've made HBO Go available without a cable subscription?

      It's an interesting time to be a cable subscriber. I called Comcast to cancel my HBO & Starz from my cable service since both Game of Thrones & Outlander were finished. They told me I could keep them both for just $1 a month each for 2 years, so I decided to keep them. They're desperate to keep the customers they already have.

      • by sheetsda ( 230887 ) <(doug.sheets) (at) (gmail.com)> on Monday August 10, 2015 @06:06PM (#50288479)

        They're desperate to keep the customers they already have.

        Procedure for lowering ISP bill:

        - Research introductory price from local competing ISPs with same speed (cable vs. DSL, etc...)
        - Call current ISP, select billing from the phone menu.
        - Tell Person1 you want them to match the other ISP's introductory price.
        - Person1's job is to make you go away so they will put you on hold for 5 minutes. Don't go away.
        - Person1 will return and tell you they can't match the price.
        - Tell Person1 you'd like to cancel.
        - Person1 will transfer you to Person2 in the billing department.
        - Tell Person2 you've found a cheaper rate and would like to cancel.
        - Person2 will keep you on hold for 10 minutes to see if you'll go away, occasionally returning with progressively lower rates but still above the competing rate. Don't go away. Don't accept anything above than the competing rate.
        - Person2 will "find" a lower rate equal to the competing ISP's introductory rate for 1 year
        - Wait 1 year, repeat.

        I have done this 3 times with a success rate of 100% on RoadRunner. Average annual savings = $180.

        The most recent time I was already on an introductory rate ($45/mo for 30 megabit) but found an even lower intro ($34/mo for same) rate at the competing ISP. Person1 had the audacity to say "I think you're already getting a pretty good rate". I was tempted to not even give them the opportunity to keep my subscription at that point.

        • by tepples ( 727027 )

          Research introductory price from local competing ISPs with same speed (cable vs. DSL, etc...)

          When such competing ISPs do not exist, such as 25 Mbps cable when the competition is 3 Mbps DSL or 10 GB/mo satellite, does this price include the cost of moving your family and finding a new job?

        • The most recent time I was already on an introductory rate ($45/mo for 30 megabit) but found an even lower intro ($34/mo for same) rate at the competing ISP. Person1 had the audacity to say "I think you're already getting a pretty good rate". I was tempted to not even give them the opportunity to keep my subscription at that point.

          Maybe he was right. And if another company was offering the same for less, maybe you should have taken them up on it instead of giving your business to the ones that make you wait on hold for an hour every year. Never price-match. Reward the companies that are providing the lower price to begin with.

  • by jafiwam ( 310805 ) on Monday August 10, 2015 @04:51PM (#50287833) Homepage Journal

    If they spent their time keeping subscribers happier rather than cannibalizing subscribers of other types of service they wouldn't be losing so much.

    The NUMBER ONE difference in cost between services comes from moving from one to another.

    If my monthly bill didn't slowly creep up after a couple of years, I wouldn't be forced to move to something else. Instead of whoring out for "new bundles", just offer a lower price. 99% of the people moving service don't want to or have to because of coverage, but do because they can save $60 a month with a new "introductory" bundle somewhere else.

    Also there is this strange resistance to allowing users to pick what they want to watch and pay for only that. Believe it or not, some people don't want four channels of QVC, and they'd rather pay the $8 for the weather channel (or whatever) instead of $22 for a bunch of shit along with the weather channel.

    • by H3lldr0p ( 40304 ) on Monday August 10, 2015 @05:03PM (#50287915) Homepage

      The entertainment industry has a long history of ignoring their customers and trying to dictate what is popular.

      For a short time, relatively speaking, they've been able to figure out how to do that and reaping a huge profit while it was happening. The amount of money was so big it blinded them to how the world and their markets were changing. Instead, these industries focused and focused again on how to industrialize (for lack of a better term) popularity of a few things. That is to say the popularity of "Boy Bands" in the '90s wasn't a complete accident and that yes, if you thought there was a formula for them there is indeed is.

      At this point, much of the upper brass in these companies are so entrenched into these methods of profit that they can't see how to get out and maintain their power structures. It's not just the profits that they've become used to. It's also their position. Which is only human. They perceive that they've worked hard to become VP or Pres of their current company and their actions aren't going to disrupt that even if it means long term their industry will survive.

      For what it's worth, these companies will continue to discount the success of Netflix and others simply because to do otherwise would likely imperil their current position. Change, will only occur when the companies are facing complete ruin, if it happens at all. Until such time that we see TW or Sony winding up their studio arms, I don't think we'll see them adapting.

      • by 0123456 ( 636235 )

        The entertainment industry has a long history of ignoring their customers and trying to dictate what is popular.

        That's what happens in industries with government-granted monopolies. What are their customers going to do? Go to one of their competitors when they want to watch Game Of Downton Abbey? Oops, copyright, you lose.

        • What are their customers going to do? Go to one of their competitors when they want to watch Game Of Downton Abbey?

          Worse comes to worst, they'll watch a show that isn't Game of Thrones or a show that isn't Downton Abbey. Sometimes substitutes are not exact.

        • by harrkev ( 623093 )

          Downton Abbey is on PBS. All you need is an antenna, and you can have it for FREE!

          I have gotten pretty good as reducing monthly expenses. I built a home theater PC with four tuners connected to an antenna. I pay for basic Netflix streaming + 2 DVDs per month. My internet is naked DSL from a company that does not throttle bandwidth (CenturyLink), and I use MagicJack for phone ($30 per year). My total for everything is under $60/month for phone, internet, and TV. Comcast would happily sell me something

    • by jandrese ( 485 ) <kensama@vt.edu> on Monday August 10, 2015 @05:10PM (#50287973) Homepage Journal
      The cost is the elephant in the room. Cable has gotten very expensive and the alternatives are so much cheaper. Plus far too many cable channels have dropped their interesting programming for cheap reality programming. How many historical documentaries does the History Channel show now? How much Sci-Fi can you find on SyFy? Animal planet now advertises how "human" they are. How many cooking channels do we really need? The worst part is some of the best new shows are coming out on streaming services like Netflix. The industry still has not realized that their shortsighted greed has doomed them in the long run.
      • SyFy just had Megalodon vs Robo Shark on! The acting was so bad it caused physical pain.
      • Re: (Score:3, Insightful)

        by tlhIngan ( 30335 )

        The cost is the elephant in the room. Cable has gotten very expensive and the alternatives are so much cheaper. Plus far too many cable channels have dropped their interesting programming for cheap reality programming. How many historical documentaries does the History Channel show now? How much Sci-Fi can you find on SyFy? Animal planet now advertises how "human" they are. How many cooking channels do we really need? The worst part is some of the best new shows are coming out on streaming services like Net

        • by jandrese ( 485 ) <kensama@vt.edu> on Monday August 10, 2015 @11:41PM (#50290879) Homepage Journal
          This doesn't make any sense. Alacarte has not seriously been on the table ever, certainly not back with the explosion of reality programming. If you wanted to blame the writers strike on for this it may have made some sense, but saying that all of the channels ruined themselves because people briefly talking about something that wasn't going to happen is just crazy talk.

          Here is a thought exercise. What if every channel was like Netflix? If you thought they were making good content you would simply subscribe. Netflix has shown that you can make good original programming on a relatively modest monthly price, and they're paying for a whole lot of licenses on top of that original programming. Imagine if there was a Sci-Fi service that made only Sci-Fi series and you could subscribe. Imagine a food/cooking service. Or a history service. Or even paid 24 hour news. Would you still spend $100 a month on traditional cable with hundreds of channels stuffed full of worthless reality programming? This is what disruptive technology looks like.
          • by AmiMoJo ( 196126 )

            I subscribe to Netflix for one or two months a year, when new episodes of House of Cards or Daredevil are available. In those months I can watch basically everything Netflix exclusive that I am interesting in.

            Current TV networks couldn't survive on that. They are built around offering 90% shit and 10% good stuff that gets released at a rate of one episode per week to keep you paying out for the rubbish. What we really need to do is get rid of the networks, and instead have companies that just provide TV sho

    • I think it's a whole series of things. Like you said, they keep trying to push up the monthly fee one way or another, and they don't let you do a la carte. They also pretty much force you to get their cable boxes and DVRs, which they also charge you a monthly fee for. And those cable boxes and DVRs suck. They feel like 15 year old tech, and they constantly break. They're big and bulky, and make a lot of heat and noise for something that seems slower and less powerful than my mobile phone.

      And you have

      • [DVRs] feel like 15 year old tech, and they constantly break. They're big and bulky, and make a lot of heat and noise for something that seems slower and less powerful than my mobile phone.

        I wonder how much of this is caused by two things: skimping on hardware in order to pay incumbent DVR patent holders such as TiVo, and continuing to use obsolete hardware because it happens to have been certified by the DRM division of CableLabs.

  • I still need Internet Access. I killed HD TV and all extended channels a couple of years ago and increased my bandwidth. Most recently I turned in the TV box itself and stuck with the tiny descrambler. I'm still charged about $100 a month for access to the 'net. I could go to $300 a month for fiber but I'm not really using the extra bandwidth I have now.

    [John]

    • I moved two months ago and learned I had an option between AT&T Uverse and Charter Digital. AT&T was 25Mbps for $50 a month with a free phone number and I didn't have to buy television services if I didn't want them. Charter was (reportedly) 600 Mbps (right...), forced you to include phone and TV, and cost well over $100 a month. Both companies wanted install fees nearly $100. Both companies report you to the copyright cartels if you torrent shit.

      I went with AT&T. Why? I know from experien

  • Well, clearly, the solution is to show more advertising to remaining customers. Go for 61 minutes of advertising per hour, 24/7 each channel. This should maximize the revenue stream.
    • by dpidcoe ( 2606549 ) on Monday August 10, 2015 @05:16PM (#50288035)
      As someone who literally hasn't had a TV (in the traditional sense) in their house for 20 years, I'm always shocked at the sheer amount of advertising whenever I'm on business travel and the hotel internet isn't fast enough for netflix. Even if it's a show I'm intensely interested in, I'd much rather wait for it to come out on DVD or arrive on netflix than suffer through all the advertising. A bit at the top and bottom of each hour, sure, but ~5 minutes of commercials every ~5 minutes? How do "normal" people stand for that?
    • by ITRambo ( 1467509 ) on Monday August 10, 2015 @06:03PM (#50288457)
      Typically we now see 20 minutes of ads for every 40 minutes of program. So, 1/3 of the time is commercials. Since commercials suck, It's little wonder that cable TV is shrinking its customer base. You can get the same crap, with fewer channels, over the air with the same 20 minutes of commercials per hour, and plenty of digital sub-channels showing old programs. Why not cut the cord when the cord keeps getting more expensive and the quality is not any better?
    • Advertising is part of my gripe also. I have Cox, and they have a service called On Demand where you can watch previous episodes. So, I wanted to watch a specific Daily Show a while ago and used On Demand to do it. First, they don't offer brand new episodes, I think the most recent one I could watch was 2 weeks old. Then, while watching it, they show commercials that are unskippable. The Daily Show has 3 commercial breaks. During one of the breaks they showed me 11 commercials (yeah, I counted).

      Compar

  • No kidding. (Score:5, Insightful)

    by Scutter ( 18425 ) on Monday August 10, 2015 @04:57PM (#50287865) Journal

    Who'd have thought that treating your customers like scumbags and cash cows might eventually cause them to leave?

    This is my surprised face.

  • fuck the cable companies. may they all die for being the abusive, government corrupting oligarchy they are

  • by ZipK ( 1051658 ) on Monday August 10, 2015 @05:06PM (#50287937)
    We dropped Comcast and deployed Leaf antennas. We get a couple of dozen channels, including the four major networks and a number of sub-channels rented by movie and rerun networks (e.g., Cozi, Movies!, MeTV, Buzzr, Laff, Decades, Retro, Bounce, Escape, Grit, Get, etc.). If there's nothing on, or the reception is being interrupted by who-knows-what, we turn off the TV and do something else. Every month we enjoy not paying Comcast.
  • I'm not unconditionally hostile to the status quo media distribution business model. My problem with them is that they tend to make content X exclusive to service Y when I am most interested in using service Z.

    You see this with lots of media outlets. You see it on consoles a lot in games. They pay publisher of X content lots of money to make the game exclusive to Y console when I use a Z PC. And here's the thing... while I'd love to play that game and would be happy to buy it... I am not buying Y console. I

  • It happens to all technologies. Someday the Internet will be replaced with something better, and people will begin to abandon that old fashioned technology.
  • Maybe they should do what we the customer's have been begging them to do for years!

    Its simple its called à la carte. It means you sell us the channels we actually effing want! we don't care if you say the extra 30 home shopping channels are free we don't want them!

    And maybe you could do something about the %50 advertising %50 show problem. I don't know how I ever put up with it now after using netflix for over a year.

    No I don't care how much it costs for you to do this. You are either going to do this

    • I'd rather pay for just the shows I watch, rather than picking an entire channel. For channels like SyFi (which is about 25% science fiction), I'd be buying 10 shows per week. For channels like The Documentary Channel, it would be more like 2.

      The Learning Channel? hahahahahahahaha what learning? Honey Boo Boo taught me nothing.

  • Just a though but for you cord cutters where are you going to get you content if cable goes away. No ads??lol they are coming? paying for content you will never watch?your doing it now but it will be a ton more. whats your thoughts? Remember HBO and MTV both WERE ad free......
  • by Anonymous Coward

    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,

  • The beginning was a while ago. When they started increasing commercials from two minutes two seconds up to three minutes, then three-and-a-half. I was trying to watch "Ray" on BET a few months ago, commercials were running past six minutes. A season of a TV series is 8-13 episodes now, not the 20-26 from decades past. There are no more real news programs. A few channels continue to pump out some good to excellent content, but you're paying a minimum of $100/month because you have to take the 80% of the bund

  • Cable has gotten... (Score:5, Interesting)

    by rshol ( 746340 ) on Monday August 10, 2015 @05:37PM (#50288185)

    ...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.

    • While that might be the rational, logical thing to do. The reality is that we will see legislation that increases the cost of doing business for alternative services.
    • Instead of being happy with consistent profitability in their business, modern capitalism says that these companies have to increase profitability every quarter - all in the name of increasing shareholder value. They couldn't increase profits as quickly the old fashioned ways as they could by cutting production costs and raising cable rates, so we got the latter.

      I made the cut about 2 years ago, and aside from having to find pirated streams of occasional sporting events I haven't missed it at all. (I'd rath

    • They've gotten rich but increasingly, they're leaving money on the table. I'd like to stream EPL soccer on NBC's sports website but I can't. They say I need a login from my cable provider but I don't have cable and don't want it. I'd happy pay them for access but my money is apparently no good without a cable subscription so i guess I'll keep hold of it and torrent the games instead.
  • In my area, I get free OTA TV. Subscribing to the bare minimum cable package, which is *JUST* the same channels as OTA provides, is $18/mo. The only advantage I would have is a more reliable signal, as with bad weather the OTA sometimes drops in and out a bit. A "standard" cable package, the next tier up, starts at $53/mo. Now, let's compare this to Netflix, which starts at only $8/mo.

    So, why is cord cutting huge? Because we all want to save a buck or two... or $40! Really, look at the difference there. It

    • The alternatives offer more value that cost savings. They're also "on demand". I get what I want when I want it, not a fixed schedule. If cable and on-demand streaming cost the same, people would chose streaming every time. But ironically they don't cost the same. Streaming costs an order of magnitude less.
  • by Jim Sadler ( 3430529 ) on Monday August 10, 2015 @06:11PM (#50288515)
    If cable wants my bucks they better put out more and better at a vastly reduced rate. They charge too much and provide too little and charge a fortune. On the other hand Net Flix gives quite a bit and some of it is great entertainment and they hardly charge at all. My cable costs me $226. a month. I do get numerous services but still it is only worth about $50. a month in my opinion.
  • The only thing that prevents me from cutting the cord is the godd***n Hallmark channel and what my wife would do to me if she couldn't get it. Those bastards refuse to offer any streaming alternative that doesn't require a cable provider account. I would gladly pay them $30+/month if it meant I could ditch cable.
  • by ISoldat53 ( 977164 ) on Monday August 10, 2015 @07:40PM (#50289283)
    Now that Jon Stewart is gone cable TV can go pound sand.
  • by Greyfox ( 87712 ) on Monday August 10, 2015 @07:50PM (#50289363) Homepage Journal
    Here's a performance of a cat playing the world's smallest violin for the cable companies.

    ...

    What? The performance is covered by a copyright and I'll get DMCAed? Fuck.

    Here is NOT a performance of a cat playing the world's smallest violin for the cable companies.

  • by Tony Isaac ( 1301187 ) on Monday August 10, 2015 @11:45PM (#50290887) Homepage

    People may be cutting the cord, but they are still paying for TV. Now they are just paying Netflix, Amazon, Hulu, and Sling, instead of Comcast, Time Warner, and Charter. Oh, wait, they still are paying Comcast, Time Warner, and Charter for the Internet service so they can also pay for streaming services. I'm not sure the total bill will be going down much.

  • espn is a problem (Score:4, Insightful)

    by speedlaw ( 878924 ) on Tuesday August 11, 2015 @02:18AM (#50291391) Homepage
    "sports fee" of $6 per month, No sports channels...don't do sports on tv $72 per year ? SNIP

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