Podcast #1261: What If Cable & Satellite Providers Exit Traditional Linear TV Business

On this week's show we take a hypothetical look at Cable and Satellite TV's future. We also read your emails and take a look at the week's news!

News:

Netflix Is Exploring Live TV and Bundles as It Struggles to Keep Viewers Hooked Scripps, DirecTV End Blackout, Ink New Retrans Deal RGB LED TVs Set For Market Growth In Coming Years What If Cable & Satellite Providers Exit Traditional Linear TV Business On this week's show we take a hypothetical look at Cable and Satellite TV's future.   We have said that we see TV being delivered via the Internet vs the traditional means of OTA, Cable, or Satellite. What would this world look like and who are the winners and losers?

Scenario Setup

Major providers — Comcast/Xfinity, Charter/Spectrum, DirecTV, Dish Network, Altice, and smaller cable operators — face accelerating cord-cutting. Traditional pay-TV subscribers have already dropped to ~34% of U.S. households. Revenue from linear TV (cable channels + satellite) is shrinking fast due to high programming costs, declining ad revenue, and competition from streamers. In this scenario, the industry collectively decides to abandon legacy linear TV (bundled channel packages) and pivots hard to two main businesses:

High-speed broadband/data which is their most profitable product. IPTV / Streaming aggregation with their own apps or virtual third party MVPD services like YouTube TV-style offerings. They sunset traditional cable TV boxes, satellite dishes, and legacy contracts over 2–3 years.

What Happens Next

For the Providers it's mostly upside. Broadband becomes ~70–80% of revenue. Margins on data are much higher than on video because there are no expensive content carriage fees. Companies like Comcast and Charter already make most of their profit from data.

Huge reduction in programming fees paid to Disney, NBCU, Warner, etc. No more maintaining old coaxial/satellite infrastructure for TV. All of which greatly cuts costs.

New Growth Areas:

Sell/partner on IPTV services (e.g., Xfinity Stream becomes the main offering, or they white-label streaming bundles). Mobile + home internet bundles (5G fixed wireless + fiber expansion). Advertising on their own streaming platforms. The biggest hurdles are massive customer service transition, potential loss of some rural satellite customers, and potential regulatory scrutiny over broadband monopolies.

For Consumers the benefits include: Lower base bills, faster innovation in home internet which results in more fiber, better