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Illustration: Rebecca Zisser/Axios

Cable TV is dying a slow death, and after years of mostly denying that reality, America's major media companies are beginning to hedge their bets and prepare for what comes next.

By the numbers: 25 million homes have cut the cord since 2012, and another 25 million are expected to do so by 2025.

Looking ahead: If projections hold and the number of households with traditional pay-TV bundles stabilizes at ~50 million, U.S. media companies would lose ~$25 billion in subscription revenue, plus any advertising losses.

The big picture: Partly due to the loss of live sports, the COVID-19 pandemic will drive cable and satellite TV providers to lose the most subscribers ever, Axios' Sara Fischer reports.

Data: eMarketer; Chart: Axios Visuals

The state of play: This has created a "tectonic shift" in the industry, with Disney, NBCUniversal, WarnerMedia and ViacomCBS all announcing major reorganizations in the last four months with an eye toward streaming.

  • Cable TV customers pay ESPN more than $9 per month, so the company has long been hesitant to cannibalize that deal by pivoting to streaming. But as cable subscriber numbers plummet, they clearly see the writing on the wall.
  • In the last two weeks, ESPN laid off 300 people — many of them in TV production — and moved most of its premium written content behind the ESPN+ paywall in an attempt to drive subscriptions.

A bold prediction: Every league will eventually go direct-to-consumer, sacrificing big paychecks from networks but gaining a direct relationship with their fans — and data about their customers.

  • In that scenario, the ESPNs of the world might start acquiring stakes in sports leagues, rather than paying for the rights to broadcast them.
  • For example, ESPN is paying billions of dollars to stream UFC fights on ESPN+ through 2025. What if they had just bought the UFC instead?

Between the lines: Not only is cable dying, but what it represents — linear broadcasts, studio shows, content designed to appeal to the masses — is also becoming a thing of the past.

  • With so many on-demand options, and a customized feed of information on social media, why would a teenager tune into ESPN or FS1 outside of live games?
  • And here's a really scary thought for legacy media: What happens if that teenager can't even be swayed to tune into the live games?

Because that's what's happening...

Go deeper

Dec 15, 2020 - Economy & Business

Scoop: Vox Media Studios targets $100 million in 2021 revenue

Vox Media Studios website

Vox Media Studios, the video and audio production arm of Vox Media, is planning to bring in $100 million in 2021 revenue while producing twice as many shows as 2020, according to sources familiar with the company’s plans.

Why it matters: Vox Media hasn't been immune from the pandemic’s financial headwinds on digital publishers, but the studios revenue would be a huge number for the company, which reportedly expected $300 million in overall 2020 revenue.

Dave Lawler, author of World
16 mins ago - World

Alexey Navalny lands back in Moscow despite threat of arrest

Navalny during a march last February. Photo: Kirill Kudryavtsev/AFP via Getty

Russian opposition leader Alexey Navalny returned to Moscow on Sunday, five months after being poisoned with the nerve agent Novichok and despite being warned that he faced arrest upon his return.

Driving the news: Vnukovo airport — where Navalny was scheduled to land and a group of supporters had gathered — was closed to arriving aircraft shortly before his flight was set to land. He landed instead at Sheremetyevo airport. It's not yet clear whether he'll be allowed to leave the airport.

Mike Allen, author of AM
3 hours ago - Politics & Policy

Biden's "overwhelming force" doctrine

President-elect Biden arrives to introduce his science team in Wilmington yesterday. Photo: Kevin Lamarque/Reuters

President-elect Biden has ordered up a shock-and-awe campaign for his first days in office to signal, as dramatically as possible, the radical shift coming to America and global affairs, his advisers tell us. 

The plan, Part 1 ... Biden, as detailed in a "First Ten Days" memo from incoming chief of staff Ron Klain, plans to unleash executive orders, federal powers and speeches to shift to a stark, national plan for "100 million shots" in three months.

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