Analyst warns of bleak outlook for cable industry


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The biggest risk to the television industry isn’t the folks who are cutting the cord to their cable TV. It’s the people who won’t buy the cord in the first place.

A report issued Monday by Credit Suisse media analyst Stefan Anninger warns that today’s teenagers are tomorrow’s ‘cord-nevers.’


‘They are growing up in an Internet-based video culture in which the mantras of ‘why would I
pay for TV?,’ ‘pay TV is a rip-off’ and, ‘I can find that for free on the web’ are getting
louder. We fear that some of these consumers will find pay TV far less relevant to their
lives than do today’s adults,’ Anninger wrote.

In his report, Anninger predicted that the multichannel video universe will drop by 200,000 subscribers in 2012 to 100.5 million.

Most of the major multichannel video program suppliers (MVPDs) have seen subscriber numbers fall over the last few years. Those declines have been blamed on a weak economy. Anninger says that while the economy has indeed played a big part in people deciding to go without a pay-TV service, to assume that the numbers will grow in an economic recovery is ‘Pollyannaish and overlooks the longer-term behavioral shift that younger consumers are undergoing.’

Won’t kids ultimately grow up and come around to pay cable? The same thing was said about kids getting land-line telephones, Anninger said, but many consumers use only a mobile phone for their telecommunications needs.

The MVPDs, Anninger said, need to start offering lower-priced programming packages. Some operators -- including Time Warner Cable and Comcast -- are doing just that. The problem is that typically those packages don’t carry all the big -- and thus more expensive -- cable networks including ESPN.

-- Joe Flint


Time Warner Cable offers no-frills package


Consumers are cutting the cord, but not for the Internet

Don’t hold your breath for a la carte