To help you understand what is going on in the media industry and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…
The media industry is in turmoil. The television business is getting whacked by cord-cutting, a weak advertising market and streaming wars that have cost billions and led to intense competition. Things will get worse before they get better.
Take stock of how far cable has fallen: Pay TV is at its lowest point since 1991, with around 57% of U.S. households subscribing to a pay TV package in the second quarter of 2023, according to research firm SVB MoffettNathanson. There are around 75 million pay TV subscribers, versus about 100 million in 2012. How low can it go? Analysts say a lot lower, perhaps a floor of 50 million.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Hollywood giants also face huge challenges as their profitable cable divisions keep shrinking. Meanwhile, Comcast, Disney, Paramount, Warner Bros. and Discovery streaming services have grown but continue to lose vast amounts of money. Netflix stands alone as a major streamer able to turn a profit.
Here are some of the key trends to watch:
Cable companies will drive a harder bargain. Comcast, Charter, Verizon, Altice and others will play hardball to avoid overpaying for channels in their bundles as they lean on their healthy broadband business. Expect more cost-cutting at media companies, along with layoffs, fewer shows, etc.
Wall Street, which first cheered big streaming investments, now wants belt-tightening and profits, so look for higher prices for streaming services and more ads.
A mixture of consolidation and divestment is ahead. For example, Disney is likely willing to sell all its channels, including ABC and even its flagship, ESPN. Private equity firms are likely buyers, but some tech companies will be interested, too.
There’s no end in sight to massive spending for sports rights, as major sports still garner big ratings. Bidders include traditional TV companies and tech giants, though leagues still gravitate to traditional networks with experience and wide reach.
Likewise, don’t be surprised if “rebundling” becomes all the rage, as traditional cable combines with streaming services into one TV package. It’s starting to happen, and streaming services, desperate to reach more viewers, will want larger audiences.
Amid all the chaos, there’s an upside for marketers, as services fiercely compete for advertising dollars. Many brands will find cheaper, better ways to reach viewers, but consumers face a glut of confusing choices. Here are some tips to help:
- As a close alternative to cable, check out cable-like online options with live channels, such as YouTube TV, Hulu + Live TV, Sling TV and Fubo.
- Consider free online options that show TV with ads. Decent, though limited, replicas of cable may include Pluto TV, Roku, Tubi, Freevee, Plex, Xumo Play and more.
- Don’t forget about old-fashioned antennas that can get over 50 high-definition channels for free. Good ones cost $20 to $130.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
Related stories
-
Is the EV Tax Credit Going Away? What You Need to KnowTax Credits There's a lot of chatter about the President-elect's plans to eliminate the electric vehicle tax credit. Here's what's happening.
-
Being Nimble Is Key to This Fidelity Bond Fund's OutperformanceThe Fidelity Total Bond ETF has done well over the long term as managers adjust to changing tides.
-
Start-ups Trying to (Profitably) Solve the World’s Hardest ProblemsThe Letter More investors are interested in companies working on breakthrough science to tackle huge societal challenges. The field of deep tech has major tailwinds, too.
-
The Big Questions for AR’s FutureThe Letter As Meta shows off a flashy AR prototype, Microsoft quietly stops supporting its own AR headset. The two companies highlight the promise and peril of AR.
-
China's Economy Faces Darkening OutlookThe Letter What the slowdown in China means for U.S. businesses.
-
Should We Worry About the Slowing U.S. EconomyThe Letter With the labor market cooling off and financial markets turning jittery, just how healthy is the economy right now?
-
Kiplinger Special: How Businesses Should Budget for 2025Kiplinger Forecasts From fuel to AI software subscriptions, here's what you can expect to pay next year.
-
Intel Braces for an Even Tougher Road AheadThe Kiplinger Letter Amid a long, costly turnaround, Intel resets expectations again. Its new woes raise questions about U.S. industrial policy and global chip competition.
-
Kiplinger Special: The Long-Term Future of the U.S. Economy
The Kiplinger Letter Kiplinger's report into what it will take the U.S. to maintain a healthy economic growth rate.
-
Chinese E-Tailers Are Surging in the U.S. Market: The Kiplinger LetterThe Kiplinger Letter Low costs and cheap shipping enable Temu and others to grab market share.
