The Cable TV Industry Is Dying. What Comes Next?

Beginning in 2013, cable TV started experiencing a loss of subscribers, and that loss grew wider in 2014. A combination of lower TV viewership because of fewer cable subscribers and other media supplanting cable has the industry at a crossroads. In fact, according to Nielsen ratings, TV viewing has been dropping about 10% per quarter. 

And now, for the first time ever, you can watch real-time, live TV over any Internet connection… on any connected TV, phone, tablet, or another device.

You’ll see it exactly as it plays on cable, live and on schedule… except you’ll be paying a fraction of the cost and you won’t have a contract.

If you hate dealing with your cable company as much as I do, this is big news, right?

But the bigger news for you and me is the opportunity this gives us to snap up three stocks that are poised to explode now that cable TV has finally been put on life support.

Just like when newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers watched helplessly as the Internet swept away their business models.

Here some reason why cable is dying

New competitors have emerged, challenging the legacy systems. Netflix, Inc. (NFLX), Amazon.com, Inc. (AMZN), Sling TV, Crackle, and Sony Corporation (SNE) provide streaming content, replacing the set-top box/TV combination as the only way to view entertainment. 

Consumers are no longer willing to pay for a plethora of channels that they don’t watch. This antiquated cable model has become usurped by streaming options of getting only what you want to watch, and even those consumers that are still with cable are requesting more targeted, smaller bundles.

Media companies that own the most sought after content, like ESPN or HBO, have recognized the change in consumer behavior and begun experimenting with offering their own streaming content. 

The costs of the legacy bundled cable subscriptions had grown so high that consumers are no longer willing to pay and are forgoing cable services all together. Between 1995 and 2005 cable bills increased three times faster than inflation, a highly unsustainable trend.

People are more wired today and prefer the ease and convenience of transitioning between devices like laptops, mobile phones, and wearable (watches) that broadband and wireless connections afford. 

Minutes spent per month on Internet videos on computers and time-shifted TV increased between 2013 and 2014 while traditional TV was the only medium that lost minutes. Whether it’s the convenience, the lower cost or the more desirable content, a shift in our viewing habits has been changing the way the industry operates. Now the question is will the legacy players be able to adapt before they are pushed out?