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Cable's death knell

Illustration of a gravestone made out of a TV, with a bouquet of flowers sitting in front of it.

Illustration: Allie Carl/Axios

Cable companies are essentially being cut out of the cable bundle business.

Why it matters: The writing has been on the wall for a while, but news coming from Disney-Fox-Warner Bros. and YouTube make it clear that cable may have months, not years, to live.

What's happening: The rollout of a new sports streaming service from the country's biggest entertainment firms, coupled with a huge milestone announcement by YouTube TV on Tuesday, sent shockwaves through the media industry.

  • Disney, Fox and Warner Bros. Discovery are creating a joint streaming venture putting all of their linear sports TV content on a single service that will launch in the fall.
  • YouTube TV's announcement that it now has more than 8 million paid subscribers places it as the fourth-largest pay-TV provider, nipping at DirecTV's heels for the third spot.

Meanwhile, Charter eked out the lead spot thanks to losing slightly fewer subscribers than No. 2 Comcast.

  • The two companies have lost a combined 7 million customers since the start of 2021.

Thought bubble: That's a harsh wake-up call for an industry that had assumed streaming TV bundles would take many more years to surpass their traditional brethren.

Be smart: The high cost of sports coupled with the swift decay of the cable bundle is forcing rivals to work together in once unthinkable ways.

  • Each of ESPN, Fox and Warner Bros. Discovery will own one-third of the venture, and they'll need to select a management team, branding and pricing.
  • Those three, along with Comcast and Paramount, are increasingly finding themselves competing with deep-pocketed tech giants like Apple and Amazon.
  • YouTube has been boosted by the addition of NFL Sunday Ticket, for which it just wrapped up its first season.
  • The announcement of the streaming joint venture comes as both Disney and WBD are negotiating their NBA TV renewal.

The big picture: Live sporting events are the only type of content left that's holding the cable bundle together.

  • Even so, millions of people are dropping their cable and satellite subscriptions at a record pace as more live sporting events move to streaming.
  • The decline of regional sports networks, a longtime bedrock of the cable bundle, is forcing teams to take a bigger role in how their games are presented to their fans. For some teams, it's affecting their on-field product.
  • It's also created an opportunity for Amazon to become a big player in the local game.
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