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Why cord-cutting more than doubled in 2019

Skinny bundles, once seen as the industry's savior, aren't immune to subscriber defections.

A Dish Network van in California

Cable and satellite TV subscribers left in droves in 2019.

Photo: Bloomberg via Getty Images

Last year was another rough year for the pay-TV industry.

The major cable and satellite TV operators collectively lost around 5.8 million subscribers in 2019, compared with 2.3 million in 2018. In the fourth quarter alone, the top five operators lost 1.5 million subscribers in total. Cord-cutters have continued to move en masse to services like Netflix and Hulu, as well as newer, more affordable streaming services from Disney and Apple.

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Hidden in those numbers is another notable trend: Some internet-based TV services like AT&T TV Now (formerly DirecTV Now) and Dish's Sling TV, which were once seen as a way to win cord-cutters back, weren't able to cover for these massive losses. AT&T's service alone lost 674,000 subscribers in 2019. Sling TV managed to add 175,000 subscribers — not enough to make up for a massive defection of Dish subscribers.

This trend has a lot to do with pricing: After initially positioning these services as skinny bundles, operators are increasingly feeling the squeeze from growing content costs, resulting in higher prices for consumers. AT&T's internet-TV service in particular has seen massive price increases.

When AT&T first introduced the service in late 2016, it offered subscriptions for as little as $35 per month. During a series of price increases in October, it told some of those early customers that they would have to pay as much as $85 per month going forward — a tough pill to swallow for consumers who transitioned to streaming to save money. The average traditional cable bill is around $110.

Some of the internet TV services from companies not weighed down by a traditional cable business have seen growth in 2019. Disney announced earlier this month its live-TV service from Hulu had signed up 3.2 million subscribers by the end of 2019, and Google disclosed 2 million paying YouTube TV subscribers in its latest earnings release.

However, some of those gains may be due to industry consolidation: Sony announced the closure of its PlayStation Vue TV service in October. "Unfortunately, the highly competitive Pay TV industry, with expensive content and network deals, has been slower to change than we expected," the company said at the time.

Those same industry dynamics also all but assure that cord-cutting is going to continue at a significant pace in 2020 and beyond. Analyst Michael Nathanson estimated last year that up to 40% of the pay-TV industry's subscriber base may be at risk, with only hard-core sports fans sticking to their TV services out of necessity. Nathanson's remarks were echoed by Roku CEO Anthony Wood this month, who estimated that half of U.S. TV households won't have a pay TV subscription by 2024.

The cord-cutting trend will likely be driven on further by the growing emergence of cheap subscription video services. Disney+, which launched in November for only $6.99 per month, already reached 28.6 million paying subscribers earlier this month, and Apple TV+ is estimated to have 33.6 million subscribers. AT&T, meanwhile, is set to double down on streaming with the launch of its HBO Max service in May.

Protocol | Fintech

Jack Dorsey is so money: What Tidal and banking do for Square

Teaming up with Jay-Z's music streaming service may seem like a move done for flash, but it's ultimately all about the money (and Cash).

Jay-Z performs at the Tidal-X concert at the Barclays Center in Brooklyn in 2017.

Photo: Theo Wargo/Getty Images

It was a big week for Jack Dorsey, who started by turning heads in Wall Street, and then went Hollywood with an unexpected music-streaming deal.

Dorsey's payments company, Square, announced Monday that it now has an actual bank, Square Financial Services, which just got a charter approved. On Thursday, Dorsey announced Square was taking a majority stake in Tidal, the music-streaming service backed by Jay-Z, for $297 million.

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Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.

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The future of computing at the edge: an interview with Intel’s Tom Lantzsch

An interview with Tom Lantzsch, SVP and GM, Internet of Things Group at Intel

An interview with Tom Lantzsch

Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corporation

Edge computing had been on the rise in the last 18 months – and accelerated amid the need for new applications to solve challenges created by the Covid-19 pandemic. Tom Lantzsch, Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corp., thinks there are more innovations to come – and wants technology leaders to think equally about data and the algorithms as critical differentiators.

In his role at Intel, Lantzsch leads the worldwide group of solutions architects across IoT market segments, including retail, banking, hospitality, education, industrial, transportation, smart cities and healthcare. And he's seen first-hand how artificial intelligence run at the edge can have a big impact on customers' success.

Protocol sat down with Lantzsch to talk about the challenges faced by companies seeking to move from the cloud to the edge; some of the surprising ways that Intel has found to help customers and the next big breakthrough in this space.

What are the biggest trends you are seeing with edge computing and IoT?

A few years ago, there was a notion that the edge was going to be a simplistic model, where we were going to have everything connected up into the cloud and all the compute was going to happen in the cloud. At Intel, we had a bit of a contrarian view. We thought much of the interesting compute was going to happen closer to where data was created. And we believed, at that time, that camera technology was going to be the driving force – that just the sheer amount of content that was created would be overwhelming to ship to the cloud – so we'd have to do compute at the edge. A few years later – that hypothesis is in action and we're seeing edge compute happen in a big way.

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Saul Hudson
Saul Hudson has a deep knowledge of creating brand voice identity, especially in understanding and targeting messages in cutting-edge technologies. He enjoys commissioning, editing, writing, and business development, in helping companies to build passionate audiences and accelerate their growth. Hudson has reported from more than 30 countries, from war zones to boardrooms to presidential palaces. He has led multinational, multi-lingual teams and managed operations for hundreds of journalists. Hudson is a Managing Partner at Angle42, a strategic communications consultancy.
Power

Google wants to help you get a life

Digital car windows, curved AR glasses, automatic presentations and other patents from Big Tech.

A new patent from Google offers a few suggestions.

Image: USPTO

Another week has come to pass, meaning it's time again for Big Tech patents! You've hopefully been busy reading all the new Manual Series stories that have come out this week and are now looking forward to hearing what comes after what comes next. Google wants to get rid of your double-chin selfie videos and find things for you as you sit bored at home; Apple wants to bring translucent displays to car windows; and Microsoft is exploring how much you can stress out a virtual assistant.

And remember: The big tech companies file all kinds of crazy patents for things, and though most never amount to anything, some end up defining the future.

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Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

Transforming 2021

Blockchain, QR codes and your phone: the race to build vaccine passports

Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.

One day, you might not need to carry that physical passport around, either.

Photo: CommonPass

There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.

Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.

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Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

Power

Viewers like you: How PBS is adapting to the streaming age

The public broadcaster has had considerable success on YouTube and other digital platforms. Now, it is looking to revamp pledging.

PBS has begun to talk to ad-supported video services, including some that distribute programming via free 24/7 channels, to help it compete in the streaming age.

Image: PBS

If there were a playbook for the streaming wars, it might read something like this: Take your most valuable assets, slap a plus behind your most recognizable brand name, and start counting the money.

For PBS, things aren't quite that easy. While the public broadcaster has made some inroads in streaming, it has been slower to embrace digital business models than some of its commercial competitors. But that could change in the coming months. PBS is in discussions to bring its app to additional platforms, including a new crop of ad-supported video services, and has plans to turn smart TVs into donation machines that could ultimately make the old-fashioned pledge drive obsolete.

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Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

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