With all due respect to Mark Twain, it appears that recent reports of traditional media’s death have in fact not been “greatly exaggerated.” If anything, they were understated. Yesterday, investors dumped their media stocks, confirming what we’ve known for some time: the mainstream corporate media is, for all practical purposes, dead as a door nail. And they have nothing and no-one to blame but themselves.
One of the reasons for the precipitous fall in the value of media stocks is a decline in cable subscriptions. This trend should come as little surprise. For several years, cable subscribers have been hit repeatedly with rate hikes and unsatisfactory service. There is little or no flexibility to the subscription plans: subscribers must choose a package that may include a handful of channels they actually watch while paying for dozens they never look at. This subscription model is doing wonders for cable alternatives such as Netflix and Hulu, where subscribers pay much lower fees and have almost unlimited choices.
The bottom line: media cable providers have been losing hundreds of thousands subscribers as they “cut the cord” and start streaming video over the Internet. Other subscribers are “shaving the cord,” downsizing their subscriptions. According to Michael Nathanson, a senior analyst at Moffett-Nathanson Research, “Questions around the death of pay TV are now front and center – even if the size and pace of declines are likely being overstated by press and [Wall] Street commentary.”
In a way, it’s a beautiful thing, seeing free market systems operating the way they’re supposed to, for a change. The cable industry has failed to keep up with the times and has been providing poor service at inflated prices. Meanwhile, online streaming services like Netflix and Hulu have been giving consumers what they want – plenty of choices at reasonable prices. As a result, those companies are doing quite well.
Between growing dissatisfaction among its customer base and its increasing irrelevancy when it comes to news and real issues, the mainstream corporate media is well on its way to the grave. We aren’t planning on being among the mourners at the funeral.