We are watching everything related to video being disrupted. For more than a year we discussed what is going on with Hollywood and the major movie studios.
This is not limited to the creators of video content. The channels are also seeing massive disruption.
For more than a decade, the hit on the cable and satellite system has grown. Known as cord cutting, this is where household drop their cable subscription. Instead, they opt to get their entertainment from elsewhere, usually over the Internet.
This was something that bled of time. It does appear, however, that things might be accelerating.
The Collapse of Cable TV
How would you feel is your company lost almost 7% of its customer base in a year?
That might be tough to swallow.
What happens if that took place in a quarter? It is what the cable and satellite companies find themselves in.
Pay-TV distributors — that's conventional cable guys like Comcast, satellite TV outfits like DirecTV, and digital alternatives like YouTube TV — lost 1.6 million subscribers in the second quarter of 2024, according to analysts at MoffettNathanson.
That is a healthy number of subscribers. As a total for these companies, it is quite a hit.
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."
Individuals are turning to on demand streaming services, including free applications such as Tubi.tv which air commercials.
Big Tech
So far, Google is the major technology player in this industry. Amazon got into video creation, adding MGM to its Prime Video studio.
This could change as X starts its move into telecommunications. The plans are for Starlink to provide Internet (which is does not), text, and phone. It is a move that would put it on par with many of the telecos such as AT&T.
It was reported that calls will be possible through X. Since there is already video uploading possible, this could end up being pushed through.
We also see the addition of the X tv app that is soon to be available in some app stores.
In other words, X is looking to get into the game also.
All of this boils down to fragmentation. Not only are people changing what content they view, they are also receiving it in a different manner.
None of this is positive for the likes of Comcast or TimeWarner. These companies are in for a fierce battle as people are presented with other options.