The cable package cause the greatest financial boom in entertainment history. This was a highly successful model that generated trillions of dollars in revenue over the last 4 decades. Between carrier fees, advertising, and monthly billing, we saw something that was unstoppable, at least from the outside.
Driven by greed, the companies involved in this industry couldn't leave well enough alone. Instead, they jumped on the streaming bandwagon, noticing the profits that Netflix was generating. Why shouldn't they take a part of that business?
The net result was tens of billions in losses by the major media companies. For the most part, they are still bleeding.
To add salt to the wound, we see the destruction in the value of the broadcast channels themselves. There were big write downs a quarter back, with more to follow.
It is a situation that is being addressed by Comcast.
Comcast To Spin Off Cable Channels
One company is not waiting around for the total implosion. A decision was made to spin the cable channels off.
Comcast has officially announced the spin-off of its cable networks, including USA Network, Syfy, MSNBC, and CNBC, into a separate, publicly traded company.
The reasoning was explained as follows.
The new company, helmed by NBCUniversal Media Group Chairman Mark Lazarus as CEO, will focus on maximizing the value of these cable channels amid the challenges of cord-cutting and the rise of streaming. Comcast believes this spin-off will provide the new entity with greater flexibility and opportunity to adapt to the evolving media environment.
To me, this is a lot of corporate speak.
If Comcast was gaining value from these entities, it would keep it on the balance sheet. The reality is no CEO wants to regularly announcing large write downs as the value of the type of entities declines further.
Do not think for a second this was a move to provide "greater flexibility and opportunity". It is a move to shift the decline from Comcast to another entity.
Naturally, Comcast is still holding onto some properties such as the streaming service along with NBC and Brave (why the latter I have no idea).
Shift In Advertising
It is not surprising that many of these broadcast related announcements occurred right after the United States Presidential elections. While most of us grow tired of the political ads, the networks love it.
Unfortunately, they are now gone for another 3.5 years. This means the money is starting to dry up (even more than it was before).
At the heart of this is the direction advertising is going. Many of the streaming services are NOW incorporating advertising into their models. This means advertisers are starting to spread their money around.
What is the loser in this? Traditional cable channels. They were the ones who received the money before.
It does not help that viewership across most of cable is down. Even live sporting events such as the NBA and NFL are seeing ratings declines.
Media Fragmentation
A lot of reasons will be given for the decline. The reality is we are seeing a massive amount of fragmentation.
Today, we see a lot more competition for eyeballs than a decade or two ago. The video below has over 25K minutes of viewing (presuming each watched the video to the end). This is a situation repeated millions of times each day on YouTube.
Of course, this is only one platforms. We see video content consumed on X, Facebook, and other social media platforms. In totality, this has a major impact.
The move away from traditional entities for news, information, and entertainment is taking its toll.
Comcast is going to suck all they can out of these channels, and then leave them for dead.
The company is smart enough to see where things are going. We know the future is not in the past.
Posted Using InLeo Alpha
Another big factor is also people simply don’t have the time to do these things anymore. With the economy in the shitter the last few years, our leisure time is few and far between as we try to figure out how to stay busy and earn some extra $$