US cable TV companies watch investors flee as viewers move online
US cable TV companies have watched their shares decline as investors panic at the acceleration of customers turning their attention to online viewing.
Walt Disney Co reported a 9 per cent decline in shares yesterday, wiping $18bn off the company’s market value, following a dip in subscribers for its cornerstone sports channel ESPN.
The dip is hugely significant as ESPN, which is only available as part of cable TV packages, has served as a lifeline for cable TV companies. The sport’s channels falling subscriber base has clearly concerned investors who are beginning to realise the dwindling influence of their once saviour.
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John Miller, a portfolio manager at Ariel Investments, told Business Insider he hadn’t seen such a decline “in a long time” adding that “It seems like people's concerns regarding cord-cutting have accelerated."
Time Warner Inc has been more willing to embrace the online model and boasts the hugely popular HBO Now however it too reported a decline in its stock value as investors sent it down 9 per cent.
Advertiser’s failing interest has also been responsible for significant declines in cable TV companies’ market value. Discovery Communications Inc, which includes Discovery Channel and Animal Planet, said advertisers’ lack of interest contributed to a 12 per cent slump in its shares. Twenty-First Century Fox Inc attributed its 7 per cent fall to a decline in advertising sales.
The second-largest U.S. satellite TV company, Dish Network Corp, saw its subscriber losses almost double from last year to around 81,000 and recognised the momentum toward cord-cutting.