TV is dying

(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at: lawrence@krubner.com, or follow me on Twitter.

Interesting:

The TV business is having its worst year ever.
Audience ratings have collapsed: Aside from a brief respite during the Olympics, there has been only negative ratings growth on broadcast and cable TV since September 2011, according to Citi Research.

Media stock analysts Craig Moffett and Michael Nathanson recently noted, “The pay-TV industry has reported its worst 12-month stretch ever.” All the major TV providers lost a collective 113,000 subscribers in Q3 2013. That doesn’t sound like a huge deal — but it includes internet subscribers, too.

Broadband internet was supposed to benefit from the end of cable TV, but it hasn’t.

In all, about 5 million people ended their cable and broadband subs between the beginning of 2010 and the end of this year.

Time Warner Cable, for instance, lost 306,000 TV subscribers in Q3, and 24,000 broadband web subscribers, too.

And Tom Rutledge, CEO of Charter Communications, told Wall Street analysts he was “surprised” that 1.3 million of his 5.5 million customers don’t want TV — just broadband internet. “Our broadband-only growth has been greater than I thought it would be,” he said.

The following charts show the evidence that cable TV is dying, and that people are also unplugging from broadband internet service.

Cable TV ratings are sinking.
Cable TV ratings are in an historic slump. Note that the “growth” line, as charted by Citi analysts Jason B. Bazinet and Joshua P. Carlson, is persistently below zero.

This is the macro problem: Ratings are falling across the board. They have been for years.

It’s not too surprising that broadcast TV ratings are down. The major networks have faced increasing competition for years from niche-interest cable channels and the better-quality programming on places like AMC and HBO.

But ratings for both cable and the broadcast networks are down.

Even ratings for some major TV events are in decline.
People just don’t watch the World Series like they used to. Recently, viewer decline is led by young people, according to Business Insider’s Sports Page:

It’s the same with basketball.
Maybe people prefer the NBA to the MLB? Turns out that today’s big stars don’t grab TV eyeballs the way they used to either.

So why are ratings in decline?
We’re at the beginning of a major historical shift from watching TV to watching video — including TV shows and movies — on the internet or on mobile devices.

This is going to hurt cable TV providers.

Nearly 5 million cable TV subscribers have gone elsewhere in the last five years. The number of subscribers remaining could sink below 40 million later this year, according to this data from ISI Group, an equity research firm (at right).

Post external references

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    http://www.businessinsider.com/cord-cutters-and-the-death-of-tv-2013-11
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