Broadcast and cable TV revenue could fall 7% this year, a TD Cowen analyst told Reuters.
Despite expanding digital advertising, the traditional TV business — which makes up 80% of ad revenue for media companies — is in a continued decline, according to the report.
The forecast underscores the larger trend of cord cutting eating away at the cable industry and the traditional way we have watched TV for decades. The mass migration of viewers to streaming services has resulted in a massive upheaval for media companies who must suddenly restructure business models that have been in place for decades. Cable TV companies are losing subscribers, while media companies are dealing with audiences whose attentions are drifting towards alternatives like YouTube, TikTok, and a host of free, ad-supported streaming services.
The numbers are already bloody. Over the last two weeks, Spectrum and Comcast released their respective 2023 fourth-quarter reports. Collectively, the two cable companies lost more than three million TV customers last year.
In addition, Spectrum’s overall fourth-quarter revenue climbed 0.3% to $13.7 billion. Comcast’s overall fourth-quarter revenue rose 2.3% — $31.2 million to $30.5 million year-over-year.
Following the reports, Comcast was dethroned as the largest cable company in the U.S. — only because it lost more customers than Spectrum — while Spectrum’s stock investment ratings were downgraded by Wells Fargo and JP Morgan analysts.
In an attempt to stay viable, cable companies that haven’t shut down have expanded into streaming TV while selling internet.
The media companies, meanwhile, are facing their own struggles. Walt Disney is slated to report its results on Wednesday, where it’s expected to continue to lose money on its streaming efforts. Warner Bros. Discovery and Paramount are expected to follow the same story.
Cable TV networks are also at risk of shutting down or being dropped by the cable and satellite companies as they look for ways to save money, potentially pressuring the media companies more.
It remains to be seen what 2024 holds for broadcast and cable TV, but it’s unlikely that traditional TV will see a meaningful resurgence in popularity.
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