Cable TV’s Demise? Honcho Shocks Investors, Claims It’s Flawed and Costly.
In a presentation to cable television leaders, Charter Communications warns that the cable industry is facing major challenges.
Charter, the second-largest cable TV company in the U.S., delivered a report to the industry highlighting the broken model and high costs of cable compared to cheaper streaming services. The New York Times reported that customers are increasingly cutting the cable cord in favor of more affordable options.
Adding to the problem, Charter’s costs are rising even as customers are signing up for cheaper services.
Charter’s warning comes after the Walt Disney Co. pulled Disney and ESPN from Charter’s Spectrum cable service due to a disagreement over carriage license terms. Charter CEO Christopher Winfrey explained that Disney’s decision to raise its carriage prices is untenable for cable providers, especially since ESPN plans to transition to 100 percent streaming.
— Charter News (@CharterNewsroom) September 1, 2023
Following Charter’s report, the company’s stock experienced a significant decline, and this trend has continued throughout the week.
Charter is not alone in facing these challenges. Other cable companies, including Warner Bros. Discovery, Paramount Global, and Comcast, also saw a decline in their stock prices after Winfrey’s statement about the industry’s untenable business model.
Winfrey believes that cable companies need more flexibility from the networks to package and price their services in a way that benefits both customers and programmers. He wants to offer ESPN and Disney’s streaming services through Charter’s cable services to prevent customers from abandoning the company or having to pay for multiple streaming subscriptions.
Sports programming is a highly competitive area in the entertainment industry, with high viewership on TV. Streaming services like Apple and Amazon are aggressively acquiring programming in this space.
However, even Disney acknowledges that ESPN as a cable network is becoming a burden. The company has been seeking partners to share the financial burden.
Cable providers, including Charter, are exploring new strategies to adapt to the changing landscape. For example, Charter plans to launch an app that allows customers to access programming without cable boxes, in collaboration with Comcast.
Despite these efforts, cable providers are facing an uphill battle. According to The Hollywood Reporter, cable lost 5.8 million subscribers in 2022 alone.
Cable has a rich history, with iconic shows like “The Sopranos,” “Ray Donovan,” “Mad Men,” and “Yellowstone.” However, with the ongoing writers and actors strike, declining movie revenues, cost-cutting measures by TV providers, and discussions about replacing actors with AI, the future of entertainment remains uncertain.
Source: The Western Journal
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