America has a huge demographic, boomers, and they're cutting costs whereever they can to make up for their bad investments of the last 2 decades and their poor retirement planning. Cutting cable or Sat makes sense ... especially sense this generation is both computer and internet savvy and those services can provide cheaper entertainment these days.
My wife and I cancelled DTV and the only thing I miss is "Friday Night Lights" and football. So I watch football at my club or neighborhood bar (its more fun there anyway and no vacuum cleaner noise either). My wife misses Oprah and crew but she is in no way willing to keep paying $90 a month for basic programming. Netflix makes up most of our viewing. We watch CNN live for free on the Net .. we watch "The Daily Show" and "Colbert" the day after. We have discovered some new Internet programs using Roku that we like as well.
I think the $180 stock price of Netflix should be telling you something.
I do see the decline of cable as a long term trend though. Just as was its emergence decades ago. My short position in DTV is small and has multi-year theme. But the decline in packaged programming is happening now. Its a revolution analogous to the daily newspaper. On top of that the media moguls have lowered the bar so much that anyone with a mind to do it can produce a Youtube TV show. Some are not half bad (i.e. "Shane") and they will get better.
You know kids there was a day all television was "free." Somehow over the years we got conditioned to paying-up for more variety and better viewing quality. It was cool and hip once. But these cable giants got greedy and fat and started charging their customers more $ than their heating and electrical bills combined to watch junk. Their content partners started delivering programming that was based on "My life is more exciting than yours!" and putting cameras in people's kitchens. And on top of that they want premium dollars to watch new release movies on pay-for-view.
I believe you can study charts ad nauseam but sometimes you just need to get out into the real world and mingle with the people. Last week my 40+ tennis partner just told me he and his wife had just got Netflix and was considering dropping cable ..... At our Christmas party our Roku device was a hit and my relatives just wanted to browse their Facebook pages. Our Christmas music was streamed through Pandora ...
At some point DTV (and some cable companies) will be an amazing "no brainer" short.
I agree with you. I've been surprised by DTV's rise since the housing bubble burst. We quit DTV last year. It wasn't worth paying over $60 --and most of the tv viewing was my kids watching the nick channels. Way cheaper to buy a few DVDs or do instant view on nflx and get an antenna for local channels.
My parents switched from DTV to Dish, because they said it was cheaper and better picture quality. One other friend that we know of quit DTV a year ago to cut back on costs. And my brother is considering quitting his cable service just because they don't watch much tv.
We get our entertainment mainly from Netflix. Sometimes Redbox, which often gets movies weeks before netflix. We're also fans of Friday Night Lights. We started watching that from netflix, and we're happy to wait for the last season to come out on dvd.
I also cancelled DTV, but for different reasons. They used to be the cream of the crop but their services and customer service have gone downhill. Wanted to upgrade to HD and DVR and they wanted to charge me full price on 1 box and half on the other. I have no movie channels and pay $77 mo. Tried 6-7 times and finally got DISH for $72 mo, HD,DTV,MGM,SONY,INDIE CH, and free HBO/Showtime free for 3 months and 1 add'tl TV for a total of 3. Once it was hooked up i called to cancel and they told me i should have contacted cancellation dept and they would have given me the upgrades and i told them i tried several times. They have called 2 already to get me to switch back? I liked my DTV and familiarity with it and had been with them 13 yrs but i guess loyalty means nothing these days when a new customer gets it all for free. I will just play the game and if it means switching every 2 yrs so be it.
Subscriber growth for the last two quarters in the U.S. is up 175,000 and 200,000 over the churn (terminations).
In South America, the number of subscribers for the year is up 1 million and they are projecting that level of growth each year between now and 2015.
Latin America has more people than the U.S. (400 million). Their cable and satellite penetration is 25 years behind the U.S. because the continent was relatively poor. In the last 10 years, gold, silver and copper mining prices are up 300%. Oil prices are up 100%, these commodity prices are changing Latin America if you have not noticed.
Before you post on a blog show that you have studied the facts being reported by the bean counters for the company each quarter. Publicly listed companies are required to send their quarterly report to the SEC with the operating results for the quarter and this information is also posted on their websites.
I am long DTV and believe it still has room to grow and bring more shareholder value, but I do agree to a point with the initial post. Internet TV is going to get bigger and bigger and fast! I already know a few people--younger, late 20's early 30's that use it solely.
While DTV has been doing an amazing job in acquiring US subs, IMO, it is not far from hitting the proverbial wall. Every sub-based model always peaks at a certain point. Pay TV is there now (cables losing, dish barely gaining, etc.) DTV has really been the only one in the States to consistently add TV subs, and they seem to come at the expense of others, not natural growth.
Completely agree about the opportunity in Latin America. Huge! Though that suffers a little due to lower pricing. Think it is about 55/month? That will no doubt grow big for many years!
I would have a hard time shorting, (obviously, I am a biased long) but 1 quarter of losing U.S. subs and it goes down 5+ points.
Netflix/internet/hulu etc. is certainly a force to be reckoned with, BUT the other piece is (I have already read a few articles) that even this content will be charged sooner or later.
Your short position in DTV explains your posted opinion.
There is nothing wrong with that, but I predict that you will lose money, especially if you hold that short position for years.