The number of cord cutters rises to record levels

Cord cutting is now more than just a trend. A new research report by SNL Kagan shows that cable and satellite providers lost 625,000 subscribers, the biggest quarterly drop ever. Now, over 100 million households still pay for television, but concerns over the loss of customers have Wall Street analysts worried over media stocks.

With Netflix gaining subscribers at pay television’s expense, it means that cable networks like ESPN, TBS, TNT and others have to charge less for their ads. ESPN’s ad revenue has dropped as a result and while the network’s parent company, Disney, poo-pooed the effect of cord cutters, it still hasn’t stemmed the downturn in stock price.

Media giants Disney, Time Warner and Viacom all saw their stocks take a tumble last week. And if the number of cord cutters keep increasing over the next year, could cable and satellite providers like AT&T, Cablevision, Comcast, Cox, Dish and others seek reductions in subscriber fees? If that happens, networks like ESPN and TNT could take a hit and as ad revenue goes down, reduced subscriber fees, once a safety net for cable networks, could suddenly bring more concerns to Wall Street.

Now this is just speculation, but pay TV can point to the fact that over 100 million households still subscribe to cable and satellite, but with more viewers going to Netflix and Amazon Prime, despite the public face of “What me, worry,” media executives must be privately worried that there’s nothing down the road to stem the tide.

So with cord cutting being more than just a mere fad, cable networks look for other ways to monetize their content and going standalone could be the next step, but as we have heard with ESPN, that is not in the near future. It leaves the networks with a decision and the providers with many unanswered questions as the ever-changing media world whips into a new age.

[Ad Age]