Cable TV – Sword of Damocles pt. X.

The sword is falling fast

• One look at the nomination and award list for the prestigious Emmy Awards demonstrates that the streaming services are now fully in the driving seat meaning with the exception of live sports, it is almost game over for the cable companies.
• It is Emmy season again and thanks to the pandemic, the streaming companies have been churning out content faster than ever which has accelerated their trajectory up the Emmy scoreboard.
• This year is almost a whitewash with Disney + winning 24 for The Mandalorian and 23 for WandaVision.
• Netflix’s The Crown has 24 and relative newcomer Apple has finally got a hit with Ted Lasso which has received 20 nominations.
• Overall Netflix, HBO, and Disney+ dominate the table with 294 nominations between them before one finds anything from the traditional end of the spectrum.
• This is NBC which comes in 4^th with 46 nominations.
• One surprise is to see how far down the table Amazon Prime is which finds itself in 10^th position with only 19 nominations having peaked in 2019 with 47.
• It is well known in the entertainment world that content is king and it is abundantly clear who is now in charge.
• Furthermore, the lock on distribution that the cable companies once had has been shattered due to the widespread availability of broadband internet.
• Historically, the cable companies have had a lock on broadband internet in many parts of the USA due to the cable infrastructure being the only way to reach many homes
• So acute is this issue that many cable subscribers openly state that the only reason they keep their cable subscription, is access to fast internet.
• Many users who live in areas where there is choice have already cut the cable.
• The number of US households that have cut the cable is expected to reach 50.4m by the end of this year and is running at around 8m cable cut per year (see here).
• I suspect that it is only the lack of options for many US households that is preventing it from falling much faster.
• This is why I have long thought that the fixed wireless solution presented by 5G at millimetre wave frequencies (28Ghz+) could greatly accelerate cord-cutting.
• This is because, fixed wireless access using 5G offers the potential to be plenty fast enough for broadband and should be reasonably simple to roll out and in some cases, an engineer visit may not be needed.
• It is still early, in terms of the rollout which is why I think cable subscribers have not accelerated their decline, but I think that it is coming.
• Either way, I think this represents an existential threat to the cable tv industry that will need to rethink its proposition to survive.
• I suspect that the result will be much smaller, more innovative but less profitable cable companies offering better customer service than they do today.
• The alternative is to be remembered as case studies of dominant companies that fell by the wayside because they refused to move with the times.
• With the way things are now, I doubt that many of their customers would be sad to see them go.