Pay-television services just recorded the largest drop in subscribers in history, and the reason is well-known: cord cutting.
Quarterly figures show the number of pay-TV customers fell by 625,000 in the latest period, Ad Age reports, citing a report by the research firm SNL Kagan.
“While about 100.4 million households still pay for traditional pay TV, the report underscored investors’ fears that cord cutting is gaining momentum and starting to fray the TV industry’s business model,” the story reports.
The piece notes that media stocks endured a selloff last week, fueled in large part by those fears. Entertainment companies reportedly lost in excess of $60 billion in value in a two-day period, with programming suppliers including Disney, Time Warner Inc. and Viacom among the hardest hit.
“So-called cord cutters are dropping pay-TV packages that cost an average $87 a month in favor of online services from Netflix and Amazon priced at under $10,” Ad Age notes. “That’s led to falling viewership at many cable networks, hurting ad sales and threatening to reduce subscriber fees.”