Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Axios on your phone

Get breaking news and scoops on the go with the Axios app.

Download for free.

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Photo: Fairfax Media via Getty Images

Satellite video companies like AT&T's Direct TV and Dish Network are having a tougher time navigating the cord-cutting crisis than some of their cable rivals.

Why it matters: Telecom companies once saw satellite TV services as a good way to expand their customer bases, leading to acquisitions like AT&T's DirecTV buy in 2015. But as viewers ditch their expensive pay-TV packages at a faster rate, those investments are becoming harder to quickly spin forward in a profitable way.

"Cord cutting is clearly affecting the satellite companies the most ... That segment of the market is in real duress."
— Craig Moffett, Founding Partner at MoffettNathanson, to Axios' Kim Hart on C-Span.

By the numbers: Satellite TV services (mainly DirectTV and Dish) had more net subscriber losses in 2017 than in any previous year, according to Leichtman Research Group, Inc.

  • Satellite companies lost 1,550,000 subscribers in 2017, compared to 40,000 in 2016.
  • The top six cable companies lost about 660,000 video subscribers in 2017 — compared to a loss of about 275,000 subscribers in 2016. (Those six are Comcast, Charter, Altice, Mediacom, and Cable ONE).

What's happening: The main reason satellite companies are in a bind is because they lack widespread broadband services to recoup the cost of people ditching pay-TV packages.

  • "The cable operators are weathering the storm relatively better in the sense that, as customers, cutting the cord is really not an appropriate moniker at the end of the day. They are disconnecting their video relationship, but they're keeping their broadband relationship, and in some ways deepening the broadband relationship ... And the cable operators are actually gaining subscriptions," says Moffett.
  • And even though satellite operators have successfully converted more pay-TV subscribers to digital streaming TV subscribers, they are struggling to make the same kind of profits with cheaper digital bundles as cable companies can with lucrative broadband packages.
  • While Dish-owned Sling TV and AT&T-owned DirectTV Now added 1,599,000 skinny bundle subscribers last year, the top cable companies — namely Comcast and Charter — collectively added 2.7 million broadband subscribers in 2017 — 83% of the net additions for the top cable companies in 2016.
Expand chart
Data: Interactive Advertising Bureau; Chart: Lazaro Gamio/Axios

The bigger picture: Beyond pay-TV, many satellite companies provide broadband services, particularly in remote areas where fiber-based broadband is too expensive to install.

  • Yes, but: Compared to fixed and terrestrial wireless broadband, satellite services have high "latency" — meaning it takes the connection a while to make the round trip between a geostational satellite and a ground station to relay the signal to consumers — resulting in a connection lag.
  • While delays are often only a matter of milliseconds, that can feel more like several seconds or even minutes —i.e., an eternity — for today’s consumers with instant-connection expectations.
  • That lag is highly disruptive for streaming video that relies on a continuous, robust connection.  

Weaker internet businesses also affect satellite companies' abilities to tap into other markets.

  • Internet of things: Slower and weaker internet connections limit the use of highly interactive, real-time applications. With the average household now owning roughly 13 internet-connected devices, slower internet isn't just a media problem, but a lifestyle problem for consumers and productivity problem for businesses.
  • Content delivery: Traditional, earth-bound fiber networks still have the clear advantage when it comes to reliable delivery of rich content. This is particularly true in densely populated urban areas —where the bulk of viewers that media companies want to reach are located.

What's next? Some satellite companies are looking to add-on services, like more DVR capabilities and additional local services, to help increase the margins of their skinny bundle services.

  • There is also a push to improve satellite internet latency issues by adding a number of “low-earth” and "medium earth" orbit systems worldwide to reduce the signal’s travel time.
  • SpaceX, for example, is interested in getting into this business with a low-orbit satellite constellation called Starlink, as are companies like OneWeb and Telesat.

Go deeper

Drought, record heat wave in West tied to climate change

People on Folsom Lake in Granite Bay, California, U.S., June 16, 2021. Photo: David Paul Morris/Bloomberg via Getty Images

The prolonged and widespread heat wave in the West, along with the region's increasingly severe drought, is a sign of how climate change has already tilted the odds in favor of such extremes, studies show.

Why it matters: The rapidly growing Southwest, in particular, is also the nation's fastest-warming region. The combination of heat and drought could lead to a repeat, or even eclipse, the severity of 2020's wildfire season in California and other states.

Ben Geman, author of Generate
2 hours ago - Energy & Environment

What to watch as infrastructure talks heat up

Illustration: Annelise Capossela/Axios

A mix of Beltway action and extreme weather events have brought the fault lines in infrastructure talks and their planetary stakes into sharper focus.

Catch up fast: Senate Democratic leaders pledged to seek big climate measures in a multitrillion-dollar, Democrats-only package that faces a very narrow political path.

Kendall Baker, author of Sports
4 hours ago - Sports

The sports stock market

Note: Michael Jordan's card is for baseball; Data: Alt; Table: Andrew Witherspoon/Axios

Shohei Ohtani's trading card value has risen 781% since the start of 2021, the highest year-to-date return of any athlete on Alt, a sports card exchange that aims to bring more liquidity to alternative assets.

Why it matters: The trading card market is the closest thing we have to a stock market for sports.