The landscape of linear TV is undergoing a seismic shift, with recent events signaling a significant decline in the traditional cable business model. In September 2022, Bob Iger, former CEO of The Walt Disney Co., predicted that linear TV was heading towards a “great precipice,” and recent developments seem to confirm his warning.
Warner Bros. Discovery and Paramount Global, two major players in the cable industry, recently took massive impairment charges on their linear cable channels, totaling $15 billion in value lost. This sudden collapse of the cable business has been a long time coming, with cord-cutting and the shift towards streaming services playing a significant role in its demise.
The decline of linear TV has been accelerated by the exodus of advertising dollars to digital platforms, further straining the already struggling cable networks. Analysts predict that cable channels could become the new newspapers, with investment funds looking to extract cash from them before they become obsolete.
In the face of this crisis, cable channels are exploring various options to survive. Some may pursue a roll-up strategy, combining their assets to reduce costs and increase efficiency. Others may seek to divest their linear assets and focus on more profitable ventures, such as streaming services or live sports.
Despite the challenges, there is still hope for the future of traditional entertainment companies. By adapting to the changing landscape and focusing on streaming and D2C (direct-to-consumer) models, these companies can find success in the digital age. However, convincing investors to buy into this new vision will be a challenging task, as the industry continues to undergo a period of transition and uncertainty.
In conclusion, the collapse of the linear TV business model is a stark reminder of the rapid changes taking place in the entertainment industry. While the old pay-TV model may be fading, there are opportunities for companies to thrive in the streaming era. By embracing innovation and adapting to new technologies, traditional players can carve out a place for themselves in the evolving media landscape.
