An alert reader passed this Bloomberg article on to me. There’s some ominous news if you’re a content delivery service. Your business model is showing some severe cracks.
Barring a major fourth-quarter comeback, 2017 is on course to be the worst year for conventional pay-TV subscriber losses in history, surpassing last year’s 1.7 million, according to Bloomberg Intelligence. That figure doesn’t include online services like DirecTV Now. Even including those digital plans, the five biggest TV providers are projected to have lost 469,000 customers in the third quarter.
AT&T sank 6.1 percent, the biggest one-day loss since November 2008. Dish, which also provides satellite service, declined 5.1 percent. Viacom dropped 2.5 percent while AMC Networks Inc. fell 6.8 percent after Guggenheim Securities LLC downgraded the two stocks to neutral from buy.
Before you get all doomsday on college football’s and ESPN’s respective futures, though, don’t miss the key paragraph in that article:
Dallas-based AT&T is pushing headlong into TV programming by acquiring HBO and CNN owner Time Warner Inc. in an $85.4 billion deal. Chief Executive Officer Randall Stephenson has argued that the acquisition will let AT&T create compelling video packages for mobile subscribers and provide valuable targeting information for advertisers.
Content is still king and as long as ESPN keeps paying for live college football, it’s going to continue to be the 800-pound gorilla we all know and love. It’s not overpaying for broadcast rights if that’s the one way to ensure it remains relevant from a marketing standpoint.
We still crave our college football and we’re still willing to pay to satisfy our craving. Sure, there may be questions about how we’ll see Lee Corso don the mascot’s helmet in the future, but as long as it keeps shelling out the big bucks, Mickey ain’t going anywhere soon.