The Growth of Cord Cutting Has Made Network Blackouts More Likely





TV Remote

TV RemoteDIRECTV NOW, DIRECTV, and U-verse TV have lost Nexstar locals and all CBS locals (on DIRECTV NOW). DISH lost Meredith-owned locals and today both DISH and Sling TV lost FOX RSNs. In the last few months, AT&T has come close to blackouts with both Viacom and A+E Networks.

Now it seems that cord cutting has a major role in these blackouts. First, for many of these services, this is the first major renewal since they went on live TV streaming services like DIRECTV NOW and Sling TV.

The other more important issue here is that cord cutting is pulling subscribers from both DISH and AT&T. This results in networks getting less money because there are fewer subscribers. Now networks are looking to get more money per subscriber to offset the lost revenue from having fewer subscribers.

At the same time networks are looking for more money per subscriber cable TV providers have less money. Not only are DISH and AT&T losing subscribers but the ones they do have are now paying for cheaper lower revenue plans.

In 2018, 3.8 million Americans canceled cable TV and did not replace it. In just the first three months of 2019, AT&T, Comcast, Spectrum, DISH, and Verizon lost over 1.1 million subscribers.

This has created a situation that has left both the content owners and the cable TV networks looking for ways to get more money or save money.

With cord cutting and cord shaving taking its toll on both cable TV and content owners it makes blackouts like this more likely.

Not only is it more likely now but look for blackouts as content owners and companies like DISH, Comcast, AT&T, and others fight for more revenue among fewer subscribers.

To make things even more complicated many content owners like Disney, NBC, and WarnerMedia are launching their own direct-to-consumer offerings. Something that is sure to upset their long-time distribution partners.

When you add together dropping subscribers, direct-to-consumer services, and falling revenues we are likely inline for a few years of painful negotiations that will put the viewers in the middle.

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