Who Killed Cable TV?
Traditional cable and satellite TV are dying. The Cord Cutting trend has changed home entertainment forever. Hi-speed Internet to the home has changed how home entertainment will be delivered. With 5G Internet right around the corner, even more homes will have access to fast (or faster) Internet speeds. Hi-speed Internet can’t be the only thing that caused the demise of cable and satellite TV. At one point, cable and satellite seemed unstoppable. Why did things change? What changed? Who is responsible? Who killed Cable TV?
Who Killed Cable TV?
Bloomberg has published an interesting article that tries to answer the question, Who Killed the Great American Cable-TV Bundle?
The article describes some of the decisions by CEOs that started the “beginning of the end” for cable and satellite TV. And the beginning of Cord Cutting.
Related… The Future of Cord Cutting is About Choices
SUSPECT #1: REED HASTINGS (CEO of Netflix)
Perhaps no one deserves more credit for threatening the old TV business model than Netflix Chief Executive Officer Reed Hastings. As the driving force behind the world’s largest streaming video service, with about 130 million subscribers, he’s taught consumers to expect an abundance of old and new shows and movies, without the irritation of commercial interruptions, for just $8 a month.
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SUSPECT #2: BOB IGER (CEO of Disney/ESPN)
TV executives have also spent billions of dollars acquiring sports rights, which has driven up the price of TV service—and almost no one has bid more aggressively for sports than Disney CEO Robert Iger. Disney, owner of ESPN, is on the hook for $45 billion in sports rights in the coming years. To cover those fixed costs, ESPN charges TV operators about $8 per month per subscriber, making it the most expensive channel and an easy target for critics.
“ESPN created the model of everybody paying for sports even if only a fraction of the country cares,” said Rich Greenfield, an analyst at BTIG and a Disney critic. “The cost of the bundle has gotten so absurd because of what Disney has done with sports rights.”
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SUSPECT #3: CHARLIE ERGEN (CEO of Dish Network)
… It wasn’t until 2015, when Ergen introduced Sling TV, that the floodgates truly opened. Sling TV is a so-called “skinny bundle,” giving online subscribers the option to buy just a few channels and pay a much lower monthly fee—in this case, about a fourth of the average cable bill. Since its arrival, at least six more online TV services have entered the market.
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“Sling TV was a watershed moment,” said Moffett, the analyst. “It broke the all-for-one and one-for-all model for the first time.”
SUSPECT #4: EVERYONE’S GREED
… In the end, the cable industry’s failure to protect the (cable) bundle came down largely to greed, Moffett said.
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Source: Bloomberg.com, Gerry Smith,
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