Cable TV Content Company's Stocks Down Based on Cord Cutting

dkreichen1968

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Cable companies love to call cord cutters an overhyped myth, but now these supposedly phantom TV fans are hurting the pay TV industry where it matters most. A new report in Nasdaq.com explains that major media companies have been taking a beating in their most recent earnings reports, which has spawned fears among investors that cord cutting is an irreversible trend that will permanently dent content providers’ ability to post ever-increasing profits.

Surveying the damage, shares of Time Warner, Inc. fell by 9% on Wednesday, Discovery Communications Inc. shares fell by 12%, 21st Century Fox shares fell by 7%, Viacom by 7.5%, and Disney by 9.2%. All told, yesterday was a major bloodbath for pay TV stocks and even the most bullish cable analysts can no longer deny cord cutting’s impact on the industry.

What’s really driving these sell offs is the realization that content providers will no longer be able to keep jacking up rates they charge cable companies for the rights to broadcast their content...

...Major media companies may hate it, but the days of insanely priced cable bundles are coming to a close.
Read More: Cord cutting vs. cable TV: Pay TV stocks getting hammered | BGR

Cord cutting is finally having an impact. At least as far as stock prices are concerned. Cable TV has been losing ratings, resulting in lower ad revenue, resulting in lower profit. The result is that investors are valuing the stocks less. Ultimately cable TV prices will have to come down in order for the industry to survive. There may come a time when linear cable TV is a thing of the past.
 
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