# 2016: Wall Street sees cord-cutting growth, losses caused by pay TV bundles



## phrelin (Jan 18, 2007)

In a Deadline Hollywood article *Big Media Hope To Overcome Wall Street's Cord-Cutting Fears In 2016* the core of the story is:



> But the conventional wisdom now holds that the industry's golden goose - the bloated pay TV bundle that charges people for channels that they don't watch - is about to be cooked. Cable, satellite and telco video subscriptions declined by 1.7% to about 98.3 million in the first nine months of 2015. The big question for 2016 is whether the pace of the decline will remain slow, or accelerate.
> 
> Potential cord cutters have many more, and more compelling, alternatives now than ever with streaming services including Netflix, Amazon Prime, Hulu, HBO Go, YouTube Red, and WWE Network. Those who simply want to escape the high price of the pay TV bundle can scale back with Sling TV, PlayStation Vue and, soon, cable companies' own low-priced skinny bundles that leave out some of the most expensive or least watched channels.
> 
> A drop in subscriptions wouldn't just endanger the per-customer fees that networks collect. They also may have to get used to lower ad sales as buyers shift dollars to digital platforms including Facebook and YouTube offering lower prices and superior targeting. TV ad sales fell 3.6% in the first nine months of 2015, Kantar Media reports.


The fact that "Netflix pays content owners about 18 cents for each hour each subscriber watches, while linear channels pay 25 cents" is also of concern. That's 28% less. And Netflix, Amazon, and HULU are funding their own programming which eliminates the middle-man distributor.

So far, the changes seem to favor the consumer. The cynic in me says someone will figure out how to reverse that trend.


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## Gloria_Chavez (Aug 11, 2008)

phrelin said:


> So far, the changes seem to favor the consumer. The cynic in me says someone will figure out how to reverse that trend.


They will attempt to stave off the decline, but may not succeed. The music recording industry is about 50% of its 2001 size. Even more adjusted for inflation.

And glance at the newspaper industry. The newspaper ad market is at least 50% smaller than it was in 2003. The NYTimes pays its reporters less, and has significantly fewer of them than at its peak. And it's worse for all the other newspapers (with the exception of the WSJ.


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## inkahauts (Nov 13, 2006)

And there is no point in attempting to try and compare tv to music and especially to newspapers. There's far to many differences to be able to say they are going down the same roads. 

Don't worry the cost of Netflix will be equal or higher than cable
Tv on a per hour cost for programs within a couple years. Or maybe even next year.


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## Wilf (Oct 15, 2008)

And then there is this: https://goo.gl/jGu3sY Somehow, I can't feel sorry for Disney. "ESPN agreed to pay more than $15 billion for *10 years* of rights to air NFL games" is just plain dumb.

In some ways the switch to streaming is reminiscent of the switch from film to digital - happening faster than anyone expected and with a loss of income (remember Kodak?).


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## Gloria_Chavez (Aug 11, 2008)

Wilf, the three major sports leagues (nfl, mlb and nba) managed to recently secure national TV deals. So the leagues will get their money.

And Disney won't go bust. But ESPN, which once represented 70% of Disney's market value, will probably represent just 25% within three years.

Inkahauts, unless you're a huge sports fan, there is no compelling reason for you to have paytv.


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## phrelin (Jan 18, 2007)

Gloria_Chavez said:


> Inkahauts, unless you're a huge sports fan, there is no compelling reason for you to have paytv.


Sling TV offers a pretty decent sports channel lineup including ESPN. And there's this new thread this morning MLB to Offer Single-Team MLB.TV Purchase Option for 2016

If you live where you can get decent high-speed internet and the four primary broadcast networks plus other local broadcast channels OTA, it's hard to imagine why anyone - even an average sports fans - would pay for cable/satellite.

Here's what Sling TV offers:










Of course, it's not everything and every feature available through cable/satellite. But sports fans need to take a look at what is available without cable/satellite.


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## scooper (Apr 22, 2002)

I want NASCAR (FoxSports1 and NBCSN) before I could think about cord cutting down to Sling TV. Otherwise - maybe...


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## billsharpe (Jan 25, 2007)

phrelin said:


> In a Deadline Hollywood article *Big Media Hope To Overcome Wall Street's Cord-Cutting Fears In 2016* the core of the story is:
> 
> The fact that "*Netflix pays content owners about 18 cents for each hour each subscriber watches*, while linear channels pay 25 cents" is also of concern. That's 28% less. And Netflix, Amazon, and HULU are funding their own programming which eliminates the middle-man distributor.


Does this mean that Netflix is losing money, at least on my account, if I watch more than 50 hours of their programming in a month?


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## phrelin (Jan 18, 2007)

billsharpe said:


> Does this mean that Netflix is losing money, at least on my account, if I watch more than 50 hours of their programming in a month?


If you were the average subscriber, yep. But then they make money on me, so it all averages out.


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## James Long (Apr 17, 2003)

So yes, they are losing money on bill (if he regularly exceeds 50 hours) but the company is doing fine thanks to others.


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## SayWhat? (Jun 7, 2009)

Ain't none of 'em gettin' a plug nickle from me. I got tired of feeding their greed.


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