ACOZO.COM: Cord cutting on the rise

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February 22, 2019

Altice USA, the cable mothership of Optimum and Suddenlink that sucked up Cablevision a few years ago, reported decent financial results on Thursday. But the report also marks the final public disclosure we needed to assess the state of cord cutting at the end of 2018. Altice revealed a net loss of 15,000 cable TV customers in the fourth quarter. We already knew that Charter lost 36,000, Comcast shed 29,000, and Verizon 46,000 for the same period. AT&T lost 391,000 for both cable and satellite TV and satellite-only provider Dish Network shrank by 334,000. Net net, that’s 851,000 fewer paying customers for pay TV.

It looks like the legions of cord cutters set a new record for the quarter and are up significantly from a year ago, when one research firm calculated almost 500,000 departed, at the time a historic high.

And there’s more bad news for the industry. Unlike last year, the number of people signing up for cable-like bundles of channels over the Internet also may be shrinking now. Most of the services, such as Sony’s Playstation Vue TV and Google’s YouTube TV, don’t disclose their subscriber numbers regularly, if at all. But AT&T does, and it revealed a net loss of 267,000 DirecTV Now subscribers in the quarter. Dish, which also discloses for its Sling TV service, increased by just 47,000, about one-quarter the gain of a year earlier. Most of the Internet cable packages raised prices by $5 or more a month during the year, cutting into their appeal to cord cutters—most of whom, after all, are motivated by trying to save money.

This year could be even more significant as two of the most anticipated new Internet streaming services finally arrive. Disney is planning to lean heavily on its “iconic brands and franchises,” in the words of CEO Bob Iger, when it launches its Disney+ service later this year. More details are expected at an April 11 investor day, including maybe the price. (Iger has promised to undercut Netflix .) Apple is relying on outside talent—everyone from Reese Witherspoon to Oprah Winfrey and Steven Spielberg—for its as-yet unnamed offering that is rumored to be officially announced on March 25. Both services obviously will offer TV fans even more reason to drop traditional pay-TV. Expect to hear about another record year of cord cutting a year from now.

Aaron Pressman

@ampressman

aaron.pressman@fortune.com

NEWSWORTHY

Pre-disrupted. German automakers Daimler and BMW last year agreed to partner on creating car-sharing services. On Friday, the pair of rivals announced they would invest $1.1 billion in five separate joint ventures: Reach Now for multimodal services, Charge Now for car charging, Free Now for ride hailing, Park Now for parking, and Share Now for car sharing.

I'll be the judge of that. After being hit by a variety of employee controversies, Google announced on Thursday that it would no longer force workers into arbitration for discrimination or other complaints. The company had already abandon last year forced arbitration for adjudicating sexual harassment complaints.

Twists and turns. On the Apple beat, two interesting rumors. The company is said to be working with Goldman Sachs on a credit card with special features for iPhone users that could be linked to Goldman's online bank Marcus. And Apple is getting ready to dump Intel chips from its Mac computers as soon as next year in favor of desktop and laptop chips of its own design, Axios reports.

Unplugged. Consumer Reports stopped recommending the Tesla Model 3, citing reliability issues after owners reported loose trim and defects in the sedan's glass. Tesla said it had "already made significant improvements to correct any issues." Meanwhile, the company said it has begun making Model 3 deliveries in China one week earlier than promised.

Faster is as faster does. After AT&T started labeling some of its 4G LTE services as "5GE," T-Mobile jokingly tweeted a picture of "9G." Better be careful. President Trump is now tweeting about the race to 6G. Back in the real world, Verizon announced plans to start offering 5G mobile service in 30 cities later this year, though it did not specify which cities or offer much more detail.

Reporting for duty. On Wall Street, Roku impressed investors but Dropbox...not so much. Fourth quarter revenue at Roku gained 46% to $276 million and the number of active accounts was up 40% to 27.1 million. Roku shares, already up an impressive 68% in 2019, gained 7% in premarket trading on Friday. Dropbox posted revenue of $376 million, up 23%, and adjusted earnings per share of 10 cents, triple the year-ago amount, with both slightly better than analysts expected. But a projected decline in profit margin for this quarter sent its shares down 7%. Dropbox's stock had gained 25% so far this year.

Summer plans. Hoping to join those public tech companies soon, Pinterest has reportedly filed a confidential initial public offering registration statement. The company is seeking a stock market value of $12 billion or more in a deal planned for late June, the Wall Street Journal reports.

FOR YOUR WEEKEND READING PLEASURE

A few longer reads that I came across this week that may be appealing for your weekend reading pleasure:

She Never Looks Back: Inside Elizabeth Holmes's Chilling Final Months at Theranos (Vanity Fair)
At the end, Theranos was overrun by a dog defecating in the boardroom, nearly a dozen law firms on retainer, and a CEO grinning through her teeth about an implausible turnaround.

It Started With a Jolt: How New York Became a Tech Town (New York Times Magazine)
Amazon's sudden decision last week to abandon its plan to build a big campus in Queens, in the face of protests from some local politicians and community activists, is a setback—but not one that reverses tech's climb in the city.

Who Needs Gender? Why Men and Women Are Dressing Identically (Wall Street Journal)
Unisex style is rising, but are separate men's and women's clothing lines really a thing of the past—and what does the gender-neutral revolution mean for you?

Greta Thunberg: 'All My Life I've Been the Invisible Girl' (Financial Times)
The climate activist on becoming the face of a global movement—and why she sees her Asperger's as a gift.

FOOD FOR THOUGHT

There is a whole sub-genre of video blogging about desk setups. What's the best laptop stand, standing desk, or succulent setup? Someone has made a video. But for those of you who are more text inclined, Stephen Wolfram, the noted programmer and CEO of Wolfram Research, has a great long and rambling exposition this week on his blog about his "personal infrastructure." It's just a fascinating reveal of the way an original thinker works, including his outdoor walking-and-typing set up, his dongle collection and, of course, how he stays productive with the Wolfram Notebooks app:

On a good day I'll type at least 25,000 characters into Wolfram Notebooks (and, yes, I record all my keystrokes). I always organize my notebooks into sections and subsections and so on (which, very conveniently, automatically exist in hierarchical cells). Sometimes I'll write mostly text in a notebook. Sometimes I'll screen capture something from elsewhere and paste it in, as a way to keep notes. Depending on what I'm doing, I'll also actually do computations in a notebook, entering Wolfram Language input, getting results, etc.

Over the years, I've accumulated over a hundred thousand notebooks, representing product designs, plans, research, writings, and, basically, everything I do. All these notebooks are ultimately stored in my filesystem (yes, I sync with the cloud, use cloud files, and file servers, etc.) And I take pains to keep my filesystem organized—with the result I can typically find any notebook I'm looking for just by navigating my filesystem, faster than I could formulate a search for it.

ACOZO.COM

Friday, February 22, 2019

Cord cutting on the rise

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