Inside the Stream: How Overlapping “Doom Loops” are Crushing the TV IndustryFriday, May 19, 2023, 12:04 PM ET|Posted by Will Richmond
In this week’s podcast we discuss the overlapping “doom loops” that are crushing the TV industry. These were first articulated by MoffettNathanson, and built upon by Colin. The doom loops include 1) TV networks shifting investment/focus from linear TV to streaming, in turn driving more cord-cutting, 2) Fewer remaining pay-TV subscribers available to shoulder the cost of sports TV networks, in turn leading to more cord-cutting, 3) Audience shifts away from traditional TV driving ad dollars to follow, further pressuring traditional TV’s revenue.
Yet another more doom loop could be added with news this week that Disney is finally pushing forward with a direct-to-consumer model for ESPN. Given how expensive that DTC service is likely to be, it’s ultimate adoption probably won’t extend much beyond hard-core sports fans.
But it will cause the unintended consequence of raising the visibility of the multibillion dollar per year “sports tax” non-sports fans have long been paying, which Major League Baseball Commissioner Rob Manfred explicated at a Paley Center event last month when he said, “It’s a great business model when a whole bunch of people pay for something they don’t really care if they have or not, which is what the cable bundle did for us. It’s hard to replicate that.”
So it’s safe to say that ESPN’s DTC service will also drive up cord-cutting.
The “doom loops” are now on display for all to see, prompting Colin and I to wonder truly, what the remaining life span of pay-TV is?
Before we get started, we give a quick overview of Wurl’s new ContentDiscovery offering, for which Colin and I wrote an accompanying white paper.
Listen to the podcast to learn more (35 minutes, 28 seconds)
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Categories: Cable Networks, Cord-Cutting, Podcasts
Topics: ESPN, MoffettNathanson LLC, Podcast