The great unplugging

media-stocks

Cable stocks are getting pounded these days, thanks to a waning outlook for ad revenue and consumer disenchantment with bundled pay-TV packages.

Consumers are increasingly pulling the plugs on their cable providers and opting instead for new video-streaming services.

The shares of cable giants such as Viacom (VIA), Comcast (CMCSA), Walt Disney Co. (DIS), and Discovery Communications (DISCK) have been under pressure of late.

 

media-stocks

 

Cord-Cutting

And with good reason.

Subscribers are leaving pay-TV providers en masse.

The industry recorded its biggest decline ever in subscribers during the first quarter, according to an analysis by the Wall Street Journal.

Sports cable network ESPN, once a star of the industry, recently laid off scores of journalists and on-air talent.

 

Media-stocks

 

Rising Star

Meanwhile, streaming service Netflix (NFLX) has about 100 million subscribers worldwide.

True, analysts are worried about slower growth, but investors continue to love the stock.

 

media-stocks

Bloomberg: Netflix (NFLX)

 

 

Takeaway

Call it the great unplugging.

Consumers, turned off by high monthly cable bills and shoddy customer service, are starting to shift away from pay-TV providers.

That could be good news for video-streaming services like Netflix, Amazon (AMZN) and Hulu, in my opinion.

Photo Credit: Fernando Cesar Nox via Flickr Creative Commons