Pay-TV industry reports losing 1.6 million subscribers in Q2 2024 Business Insider“There seems to be no reason why these losses will stop,” he added.
Pay TV includes cable and satellite television (CSTV), as well as “digital alternatives” like YouTube TV, which offer streaming equivalent or the same channel packages as CSTV.
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The 1.6 million subscribers lost in the second quarter represented 6.9% of the industry total, and there is no reason to think the decline will slow, analysts Craig Moffett and Michael Nathanson wrote. “It is becoming increasingly clear that industry-wide declines are no longer evident. Any floor.”
As we've discussed here before, a few years ago it was thought that digital pay-TV distributors like YouTube TV and Hulu Live would make up for losses for traditional distributors, but that's no longer true.
By the way, just five years ago in 2019, 90.4 million A household that subscribes to some form of CSTV.
The number is currently about 68.76 million.
In just six months, a staggering 4 million households canceled their CSTV subscriptions, resulting in a net loss even when new subscribers are included.
Over the next five years, that number is projected to fall below 60 million.
Compared to the second quarter of 2023, CSTV lost 7% of customers.
Everyone but me assumed that CSTV bundles would move to streaming to make up for traditional losses, but what no one understood was the value of streaming services compared to the giant rip-off that is CSTV.
With CSTV, you pay a lot of money and end up paying a lot of money for a ton of channels you never watch. This is infuriating, but it's not the fault of the CSTV provider. It's the fault of greedy multinational entertainment corporations who force CSTV providers to accept a bunch of crappy networks that no one watches because they want the one or two channels that people actually watch. For example, if a CSTV provider wants ABC-TV and ESPN, the Disney grooming syndicate forces them to also accept the lowest rated channels, such as Disney Channel, Disney Junior, Lifetime, Lifetime Movies, Lifetime Women, ABC Signature, and Family Channel. This is called a bundle, and it's paid for by you through your cable bill.
Streaming has turned all that upside down: Why pay $120 a month to subscribe to a ton of crappy shows you'll never watch when you can pay $20 a month on Netflix to subscribe to a ton of crappy shows you'll never watch?
This shift to streaming has been devastating for Hollywood and is a major reason why stock prices for these entertainment companies have plummeted.
CSTV was affirmative action against these multinational corporations. For decades, over 100 million households paid these corporations large sums of money for crappy programming they never watched. There was no merit to this business model.
Streaming has its pros. You have to want the content to pay for it. That's why every streaming company except Netflix is losing billions of dollars. Not many people want to watch that crap.
This is why DirecTV is currently engaged in what's called a “carriage battle” with Disney: DirecTV wants to keep costs down to prevent streaming losses, and greedy Disney is still trying to get DirecTV to accept networks that no one watches, thus raising costs for customers and encouraging them to churn and move to streaming.
Why doesn't Disney just say to DirecTV, “Sure, you don't have to accept networks that nobody watches. Pick the networks you want.” Because Disney is greedy. Disney wants you to pay for crappy networks that you'll never watch.
Beneath the surface of all this, two more issues are emerging…
The first is sports streaming outlet Venu. The availability of ESPN, Fox and Comcast sports for streaming will accelerate the downward spiral of CSTV. Additionally, Venu is currently embroiled in a lawsuit that could ban bundling altogether. Venu wants to force all subscribers to sporting events to also agree to the delivery of junk channels. The outcome of this lawsuit will be very interesting.
The second problem is free streaming services like Pluto, Roku TV, Tubi, FreeVee, etc. There is really no reason to subscribe to a streaming service. There are so many free streaming services out there – movies, TV, reality shows, home and garden shows, true crime documentaries, classic TV – it's incredible. Even subscription streamers are concerned that free streamers will ruin their business model.
CSTV removed the ratings pressure so there was no benefit to it. The money coming in from CSTV far exceeded advertising revenues. There was no need to make programming to please customers because stupid customers were paying for it anyway.
Streaming changes everything. Suddenly, satisfying your customers becomes a necessity.
John Nolte's first and last novel Borrowed time, Winning 5-Star Rave Reviews Submissions from our everyday readers. You can read excerpts here here And a detailed review here. Also available in Hardcover and Kindle and Audiobooks.
