CNBC’s Alex Sherman takes an in-depth look at how major media companies are preparing to lose another 25 million cable subscribers and why that may be expediting the demise of several channels.
The story is of particular note for golf given the references to Comcast (NBC, Golf Channel) and Discovery (GOLFTV). But also because all signs point to streaming becoming the required way to get your tournament viewing. Given that the platform is not the preferred way to watch for golf’s older demographic and is still remarkably clunky, it would appear golf’s major organizations relying on cable arrangements have a lot to lose.
As always please hit the link and read the entire story. Here are a few highlights for discussion purposes, starting with this
Moreover, a vicious cycle is settling in that could accelerate cable bundle defections. Distributors like Comcast and Charter no longer care that much whether or not a customer buys traditional pay-TV. The price of a video bundle has gotten so high, there’s little margin for them -- especially compared to broadband internet service.
“You get to that point of financial indifference, then you’re seeing the EBITDA margins go in the right direction and continue to increase,” Comcast CEO Brian Roberts said last month at the Goldman Sachs Communacopia Conference. “That’s one of the big pivots of Comcast the last decade.”
So instead of threatening blackouts to lower rates, pay-TV operators are accepting rate hikes, passing them along to subscribers, and accepting the fact that price-sensitive customers will cancel TV and go to internet only.
Meanwhile, media companies are shifting their best content to their new streaming services. The result for consumers is higher and higher prices for lower and lower quality.
If that wasn’t disturbing enough there is this:
