The pay-TV industry lost 1.6 million subscribers in the second quarter of 2024, reports Business Insider, adding that “there doesn’t seem to be any reason for those losses to stop.”
Pay TV is cable and satellite TV (CSTV). It also includes “digital alternatives,” like YouTube TV, where you stream the equivalent of CSTV — the same channel packages.
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Those 1.6 million subscribers lost in the second quarter account for 6.9% of the industry’s base, and there’s no reason to think the slide is going to slow down at all, analysts Craig Moffett and Michael Nathanson write: “It is becoming increasingly clear that there is no longer any floor.”
As we’ve discussed here before, a few years ago there was a thought that digital pay-TV distributors like YouTube TV and Hulu Live would replace losses at conventional distributors, but that’s no longer true.
For context, in 2019, a mere five years ago, 90.4 million households subscribed to some form of CSTV.
That number is now down to about 68.76 million.
In six months, a staggering four million households have canceled their CSTV, and that is net losses with however many new sign-ups included.
In another five years, that number is projected to be below 60 million.
Compared to the second quarter of 2023, CSTV has lost seven percent of its customers.
Everyone thought — except me — that the CSTV bundle could move to streaming and make up for the conventional losses. What everyone didn’t understand, though, was the value of a streaming service compared to the giant ripoff that is CSTV.
With CSTV, you pay a fortune and are forced to pay that fortune for a ton of channels you never watch. That is maddening, and it is not the fault of your CSTV provider. It’s the fault of the greedy multinational entertainment corporations that force your CSTV provider to accept a bunch of shitty networks no one watches if they want one or two channels people actually do watch. For example, if your CSTV provider wants ABC-TV and ESPN, the Disney Grooming Syndicate will force them to also accept basement-rated channels like the Disney Channel, Disney Junior, Lifetime, Lifetime Movies, Lifetime Women, ABC Signature, the Family Channel, and on and on… It’s called bundling, and YOU pay for it through your cable bill.
Streaming has upended all that. Why pay $120 a month to subscribe to a bunch of crap you don’t watch when you can pay $20 a month to subscribe to a bunch of crap you don’t watch on Netflix?
This move to streaming is killing Hollywood, and it’s the primary reason the stocks of these entertainment companies have taken a dive.
CSTV was affirmative action for these multinationals. For decades, more than 100 million households paid a fortune to these companies for crap they never watched. There was no merit in the business model.
Streaming is all merit. You have to want the content to pay for it. That’s why every streaming outlet except for Netflix has lost billions. Not enough people want to watch that crap.
This is why DirecTV is in what’s known as a “carriage battle” with Disney right now. DirecTV would like to keep its costs down to stop the losses to streaming. Greedy Disney still wants to force DirecTV to accept a bunch of networks no one watches, which raises costs to the customer and encourages them to cancel and move to streaming.
Why doesn’t Disney tell DirecTV, “Okay, you don’t have to accept the networks no one watches. Take what networks you want”? Because Disney is greedy, that’s why. Disney wants you to pay for garbage networks you never watch, that’s why.
Two other issues are bubbling beneath the surface of all this…
The first is the sports streaming outlet Venu. Once ESPN, Fox, and Comcast sports are available via streaming, the CSTV doom spiral will quicken. What’s more, Venu is caught up in litigation right now, the kind of litigation that could outlaw bundling entirely. Venu wants to force anyone who subscribes to its sporting event to also agree to carry its junk channels. The outcome of this suit will be very interesting.
The second issue is all those free streaming outlets — Pluto, Roku TV, Tubi, and FreeVee. There really isn’t any reason to subscribe to a streaming service. There is so much free streaming out there — movies, TV, reality shows, home & garden shows, true crime, classic TV — I can hardly believe it. Even the subscription streamers are worried about the free streamers undermining their business models.
CSTV removed merit because it removed ratings pressure. The money coming in from CSTV dwarfed advertising revenue. There was no longer any need to create programming that pleased the customer because the stupid customer paid for it anyway.
Streaming changes all that. Suddenly pleasing the customer is a necessity.
John Nolte’s first and last novel, Borrowed Time, is winning five-star raves from everyday readers. You can read an excerpt here and an in-depth review here. Also available in hardcover and on Kindle and Audiobook.
Jesus Christ is King
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