It’s a rough time out there for any business, because the economy is so limp. Things seem to pick up, then they slowly tread backwards. And that’s what’s been happening with print media, the music industry and the cable industry. Many are quick to champion “the death of…” fill in the blank, but in reality, the issue is a little more complex than that.
Last quarter, every single major cable company (and some minor ones) suffered in this economy. This isn’t because people are leaving the cable companies behind. Every summer is rough for cable companies because that’s the season when most people move and business is typically slower for everything from Paul’s Taxi to Joe’s Donuts. But cable isn’t going away any time soon.
Actually, cable stocks are really popular right now. According to Forbes, “Comcast (CMCSA) raised its dividend 44% in February, and Time Warner Cable’s (TWC) went up more than 16% then. Cablevision Systems Corp. (CVC) hasn’t raised its dividend since early last year, but its dividend yield is a nice 3.85%. Yields for all of these companies are better than the 1.7% yield on the 10-year Treasury now.”
The way people watch cable in the future could be any way. But one thing’s for sure – people are still going to get incredibly engrossed in some six season storyline and talk about it incessantly until the next big thing comes around. So if cable suffers, it will switch over to something different, like internet, which most cable companies offer. For now, it’s actually cheaper to bundle cable and internet together for most people because then you don’t have to worry about data caps or having to wait the next day for your show to appear in some kind of online queue.
So don’t worry about missing those shows like Breaking Bad or Walking Dead. The industry may be going through some struggles just like every other industry, but you’ll still be able to be entertained to no end. Cheers to that!
