Networks across the board have suffered sharp stock drops as television viewers appear more than ready to cut the cord on traditional cable and satellite services. It appears that the dominance of Netflix and other video streaming services is truly, as measured in financial statements and viewership numbers, changing the way people watch their favorite programs. As a result of the very fast and evolving developments in media technology continue, traditional television as we know it may soon disappear.
Presently, both subscriber and distribution profits have declined for all major television networks as more and more viewers choose not to pay for the increasing costs of traditional cable and satellite services. Not only are new viewers choosing not to purchase these services, existing viewers are cancelling their subscriptions. Moreover, networks are losing millions in ad revenue as television ratings continue to decline. The reason is simple: more viewers choose to watch their favorite programs on video streaming services, with Netflix in the lead and other outlets like Amazon Prime and Hulu slowly catching up.
Additionally, Facebook is consuming time of users everywhere, which also cuts into traditional television viewing. Anthony DiClemente, a media analyst at Nomura Securities stated that Netflix and facebook “are at a scale that we really haven’t seen historically in media in terms of the number of subscribers and the number of users.” Charles W. Ergen, chairman of the Dish Network echoed this statement stating that, “[Viewership] has totally, totally shifted to Netflix. Netflix is the most powerful content aggregator in the world today, and there’s nobody that’s even close.”
The stocks of Disney, Comcast, Time Warner, 21st Century Fox, CBS, Viacom, AMC Networks and Discovery Communications all dropped in value Wednesday. Many analysts commented that if Disney, the world’s largest entertainment company can be dinged, many smaller companies might not stand a chance.
Despite the sharp stock declines, Disney fiercely defends its television programming, which include its sports juggernaut channel, ESPN. Robert A. Iger, chief executive of Walt Disney Company told CNBC on Wednesday that the company and ESPN were doing just fine. “We are very bullish about our cable business, and we are very bullish about ESPN. The [cable package bundle that includes ESPN] is not going away. Not only is it not going away, it is going to continue to grow.”
Officials from other networks had similar statements regarding their programming. Despite their positive outlook, they cannot deny the ever-increasing dominance of Netflix and online video streaming.