Monday, April 30, 2018

Report: Cable TV’s Cord-Cutting Woes Grow

More customers are dropping cable TV as they turn toward streaming services like Netflix Inc., a fundamental shift in consumer behavior that was on display last week in painful earnings reports from cable and telecommunications companies, according to the Wall Street Journal.

As viewers flee traditional TV for streaming-video services, Netflix has arguably been the biggest winner, adding subscribers at home and abroad at a clip that has outpaced Wall Street’s expectations.

Other tech companies are also angling to capitalize on consumers’ changing habits. Inc.
now has more than 100 million customers for its Prime subscription service, which includes a video offering the company has been pouring money into, including a deal on Thursday to keep streaming NFL games. Google Inc. is ramping up its YouTube TV streaming service, an online bundle of cable channels that competes with the likes of Hulu Live and Sony PlayStation Vue. And Facebook Inc. and Apple Inc. have each set aside as much as $1 billion for original programming meant to lure more viewers away from traditional TV.

Investors are growing concerned about such services stealing away market share, said Guggenheim Securities analyst Michael Morris, leading some to sell out of slow-growth traditional cable and telecom and buy into tech stocks.

“Companies like Amazon and Netflix are delivering game-changing convenience at incredibly efficient prices,” Mr. Morris said. “As an investor, you say, ‘I don’t know how this plays out, but I do know it is very difficult to compete if my competitor is undercutting me on the pricing side.’ ”

From the beginning of 2015 through the end of last year, nine million Americans have either cut the cord or chosen not to buy a traditional cable package when moving into new households, according to estimates from MoffettNathanson.

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