Q. You have a lot of thoughts on what will happen with DIRECTV. I would like your thoughts on what cable TV will do in the future? With cord-cutting going up and TV subscriptions going down, do you think cable will eventually get out of the TV business and just focus on providing Internet, which is doing great business. — Hal, Albany, New York.
Hal, that’s a great question. While cable TV operators aren’t losing as many subscribers as DIRECTV, their video business is struggling. Comcast, for example, lost nearly 500,000 video customers in the second quarter. (Note: The nation’s largest cable operator will report its third quarter results tomorrow.)
Like DIRECTV, cable TV services are losing subscribers to cord-cutting, and new, and less expensive, live streaming services such as Sling TV, YouTube TV and Hulu Live. Some smaller cable and telco TV services have responded by discontinuing video service, or eliminating marketing it. Instead, they are now focused on expanding their Internet service which continues to grow rapidly thanks to the popularity of streaming.
This has triggered some chatter that the cable business will soon stop providing traditional video packages and pivot to one that only sells the Internet along with subscriptions to popular streaming apps such as Netflix, Disney+, Hulu and HBO Max. You already see some cable operators, such as Comcast, selling the apps so it’s not a reach to envision them dropping the declining sector to focus on the growth categories.
I think this could happen with most, if not all, small cable operators in the next few years. You might even see a few mid-sized cable companies making this switch. With TV subs likely to continue falling, the video business might become more trouble than it’s worth for a company that is already operating on thin-profit margins.
But as for the major cable TV operators, such as Comcast, Charter, Cox and Altice’s Optimum, I believe they will continue to offer video for many years to come. These companies are more diversified financially, and the video business helps them generate customers in other areas.
For instance, Comcast owns numerous TV channels under the NBC banner as well as the new Peacock streaming service. Charter has SportsNet LA, the regional sports channel, and an original programming unit. The video packages are a great promotional tool for them.
The majors also use the video plans to persuade people to bundle service with phone and Internet, generating more income.
Bottom line: Cable TV will be around for a long time, as will satellite TV, in my humble opinion.
Have a question about new TV technologies? Send it to The TV Answer Man at swann@tvpredictions.com. Please include your first name and hometown in your message.
— Phillip Swann
I am wondering that when Elon Musk’s Starlink global internet LEO network is fully functional, will it put pressure on traditional internet suppliers and cause chaos in the internet supply and marketing chains? It’s starting out ostensibly at $99 per month, but I don’t see it staying there!
“Bottom line: Cable TV will be around for a long time, as will satellite TV, in my humble opinion.”
Well, that’s more than I can say about my savings.