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Is Internet TV Losing Pay-TV Service-Strengthening Momentum?
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The Internet TV service, launched by leading pay-TV operators in the U.S. and gaining market traction since 2015, has yet to cope up with the onslaught of low-cost online video streaming services. Internet TV emerged as an alternative to counter the competitive threat to the pay-TV business model posed by these services. Low-cost video streaming had resulted in massive cord cutting in the industry.
However, according to a report by MoffettNathanson, the number of customers signing up for the various Internet TV services in the first quarter of 2017 were far less than the number of customers lost by the traditional pay-TV service providers, indicating acceleration of cord-cutting. While 477,000 subscribers signed up for various Internet TV packages in the quarter, the pay-TV service providers lost 732,000 customers. This clearly shows that Internet TV services have failed to mitigate the loss of the pay-TV industry as a whole.
Technically, Internet TV is similar to pay-TV offerings. Its shows can be viewed using a broadband connection and mobile gadgets like tablets, smartphones, Roku box and smart TV, to name a few. To sum it up, Internet TV offers a TV Everywhere experience to subscribers at a cost-effective manner. The growing deployment of 4G LTE mobile network and significant adoption of portable mobile devices are the primary reasons propelling the popularity of Internet TV.
Major pay-TV operators, such as AT&T Inc. (T - Free Report) , DISH Network Corp. and Sony Corp. have already launched their Internet TV services. Verizon Communications Inc. (VZ - Free Report) and Comcast Corp. (CMCSA - Free Report) are the latest entrants. Most of these companies are offering both legacy pay-TV services as well as Internet TV service with selected TV channels at lower costs. Comcast and Sony currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The pay-TV operators are yet to find out an appropriate trade-off between these two types of services. Making online ventures more attractive is resulting in more subscribers for the new services at the expense of the traditional pay-TV business model. Ultimately, the Internet TV service is yet to stop cord cutting, the biggest threat for pay-TV operators.
Meanwhile, more online TV services, from the likes of YouTube and Hulu, have entered the market, increasing the competition. This has made the Internet TV market intensely competitive. It remains to be seen how major pay-TV operators can survive the competition.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
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Is Internet TV Losing Pay-TV Service-Strengthening Momentum?
The Internet TV service, launched by leading pay-TV operators in the U.S. and gaining market traction since 2015, has yet to cope up with the onslaught of low-cost online video streaming services. Internet TV emerged as an alternative to counter the competitive threat to the pay-TV business model posed by these services. Low-cost video streaming had resulted in massive cord cutting in the industry.
However, according to a report by MoffettNathanson, the number of customers signing up for the various Internet TV services in the first quarter of 2017 were far less than the number of customers lost by the traditional pay-TV service providers, indicating acceleration of cord-cutting. While 477,000 subscribers signed up for various Internet TV packages in the quarter, the pay-TV service providers lost 732,000 customers. This clearly shows that Internet TV services have failed to mitigate the loss of the pay-TV industry as a whole.
Technically, Internet TV is similar to pay-TV offerings. Its shows can be viewed using a broadband connection and mobile gadgets like tablets, smartphones, Roku box and smart TV, to name a few. To sum it up, Internet TV offers a TV Everywhere experience to subscribers at a cost-effective manner. The growing deployment of 4G LTE mobile network and significant adoption of portable mobile devices are the primary reasons propelling the popularity of Internet TV.
Major pay-TV operators, such as AT&T Inc. (T - Free Report) , DISH Network Corp. and Sony Corp. have already launched their Internet TV services. Verizon Communications Inc. (VZ - Free Report) and Comcast Corp. (CMCSA - Free Report) are the latest entrants. Most of these companies are offering both legacy pay-TV services as well as Internet TV service with selected TV channels at lower costs. Comcast and Sony currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The pay-TV operators are yet to find out an appropriate trade-off between these two types of services. Making online ventures more attractive is resulting in more subscribers for the new services at the expense of the traditional pay-TV business model. Ultimately, the Internet TV service is yet to stop cord cutting, the biggest threat for pay-TV operators.
Meanwhile, more online TV services, from the likes of YouTube and Hulu, have entered the market, increasing the competition. This has made the Internet TV market intensely competitive. It remains to be seen how major pay-TV operators can survive the competition.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>