Cord-Cutting: A 2011 Prediction on Cable's Demise - Voice of the People

Zacks' Voice of the People Highlights user MightyMo: "Cord-Cutting: A 2011 Prediction on Cable's Demise" from the People & Picks community.

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Cord-Cutting: A 2011 Prediction on Cable's Demise


Young people are pretty smart. They're not going to pay for something they don't need to.

Credit Suisse says its studies show that young adults are now turning to Netflix (NFLX) to acquire film and TV shows. ESPN studies show it's middle income families trying to save money.

Cable subscriptions have dropped the last two quarters. This hasn't happen since, well, forever.

Although minor for now, this I suspect is the beginning of a larger trend. It will be slow at first.

Although being downplayed by the current media giants, this was how Blockbuster downplayed it's monopoly on rental videos. Now Blockbuster is in near bankruptcy. The media types that have their head in the sand won't survive. Already some are denying reality by saying this is all hype. Well, tell that to the music industry and how it changed with Apple's (AAPL) iTunes and iPad. Tell that to Google (GOOG) that is investing huge sums. Comcast (CMCSA) understands this and at the moment is running scared. Time Warner Cable (TWC) has already come out with a lower price bundle. Basically, NFLX is providing streaming video from $9 to $60 whereas the cable prices run from around 70.00 to 115.00 monthly.

Our 'pig' stocks, AAPL, AMZN, NFLX and GOOG are all fighting to get a piece or all of this action. There's a war going on and it's right in your home TV areas.

It's expected that cable and satellite companies won't be able to net increase subscriptions when their existing customers come to renew subscriptions with new customer subscriptions. I think this could lead to much lower rates on cable. However the trend is still streaming video from internet-connected to TV and disc players.

So as we get to the 2011 prediction season, our first predication is the trend towards this versus traditional means via cable and satellite of receiving information on TV's.

The word for this has already been labelled CORD CUTTING. Cord cutting, coming to a home near you! A term used in the industry where consumers cancel their traditional pay-TV subscription.

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