Recently during Dish’s earnings call, they talked about how the investment markets have become closed recently. Now we are getting a report from S&P Global Market Intelligence that shows how investors are starting to stop the flood of free cash into cord cutting services and traditional TV services.
According to the S&P Global Market Intelligence report in 2019, there were 38 deals that brought in over $7.5 billion of investments into cord cutting services. In 2022 there were 29 deals that invested $3.7 billion into cord cutting. So far, though, in 2023, only three deals have been made to invest in cord cutting.
In the past many streaming services have counted on investors to keep them afloat. Surprisingly a large number of cord cutting services have yet to turn a profit, including large ones like Parmount+ and Disney+. (Both Paramount+ and Disney+ do expect to make a profit in 2024 or 2025.)
With this change in funding, it has forced many cord cutting services to speed up their plans to become profitable. This has resulted in some services cutting back on what they spend on and others raising their prices.
We have seen even large companies like Paramount and Disney announced plans to cut back on new programming and lay off staff. Paramount recently cut 25% of its TV staff and consolidated its management over its networks.
Already Disney has said they expect to raise the price of Disney+. Netflix is cracking down on password sharing, and other have been reports of other price hikes coming soon.
The one good news for cord cutters is they are not alone in facing price hikes. These same issues are affecting cable and satellite providers also. We have already seen many of them announce price hikes for 2023.
Money has also driven a growing number of cable TV services to get out of TV. Recently we learned that WOW would join Frontier and others in either shutting down their TV service or stopping selling it to new customers. This comes as many smaller cable companies are finding TV to just not be profitable. Other cable TV companies are raising prices and increasing fees in order to try and keep their services going.
What has become clear in 2023 is that cable TV and cord cutting services need to turn a profit. If they don’t they won’t be around much longer.