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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 | Workplace

The Activision Blizzard lawsuit has opened the floodgates

An employee walkout, a tumbling stock price and damning new reports of misconduct.

Activision Blizzard is being sued for widespread sexism, harassment and discrimination.

Photo: Bloomberg/Getty Images

Activision Blizzard is in crisis mode. The World of Warcraft publisher was the subject of a shocking lawsuit filed by California's Department of Fair Employment and Housing last week over claims of widespread sexism, harassment and discrimination against female employees. The resulting fallout has only intensified by the day, culminating in a 500-person walkout at the headquarters of Blizzard Entertainment in Irvine on Wednesday.

The company's stock price has tumbled nearly 10% this week, and CEO Bobby Kotick acknowledged in a message to employees Tuesday that Activision Blizzard's initial response was "tone deaf." Meanwhile, there has been a continuous stream of new reports unearthing horrendous misconduct as more and more former and current employees speak out about the working conditions and alleged rampant misogyny at one of the video game industry's largest and most powerful employers.

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Nick Statt
Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.

Over the last year, financial institutions have experienced unprecedented demand from their customers for exposure to cryptocurrency, and we've seen an inflow of institutional dollars driving bitcoin and other cryptocurrencies to record prices. Some banks have already launched cryptocurrency programs, but many more are evaluating the market.

That's why we've created the Crypto Maturity Model: an iterative roadmap for cryptocurrency product rollout, enabling financial institutions to evaluate market opportunities while addressing compliance requirements.

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Caitlin Barnett, Chainanalysis
Caitlin’s legal and compliance experience encompasses both cryptocurrency and traditional finance. As Director of Regulation and Compliance at Chainalysis, she helps leading financial institutions strategize and build compliance programs in order to adopt cryptocurrencies and offer new products to their customers. In addition, Caitlin helps facilitate dialogue with regulators and the industry on key policy issues within the cryptocurrency industry.
Protocol | Workplace

Founder sues the company that acquired her startup

Knoq founder Kendall Hope Tucker is suing the company that acquired her startup for discrimination, retaliation and fraud.

Kendall Hope Tucker, founder of Knoq, is suing Ad Practitioners, which acquired her company last year.

Photo: Kendall Hope Tucker

Kendall Hope Tucker felt excited when she sold her startup last December. Tucker, the founder of Knoq, was sad to "give up control of a company [she] had poured five years of [her] heart, soul and energy into building," she told Protocol, but ultimately felt hopeful that selling it to digital media company Ad Practitioners was the best financial outcome for her, her team and her investors. Now, seven months later, Tucker is suing Ad Practitioners alleging discrimination, retaliation and fraud.

Knoq found success selling its door-to-door sales and analytics services to companies such as Google Fiber, Inspire Energy, Fluent Home and others. Knoq representatives would walk around neighborhoods, knocking on doors to market its customers' products and services. The pandemic, however, threw a wrench in its business. Prior to the acquisition, Knoq says it raised $6.5 million from Initialized Capital, Haystack.vc, Techstars and others.

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Megan Rose Dickey
Megan Rose Dickey is a senior reporter at Protocol covering labor and diversity in tech. Prior to joining Protocol, she was a senior reporter at TechCrunch and a reporter at Business Insider.
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Protocol | Workplace

What’s the purpose of a chief purpose officer?

Cisco's EVP and chief people, policy & purpose officer shares how the company is creating a more conscious and hybrid work culture.

Like many large organizations, the leaders at Cisco spent much of the past year working to ensure their employees had an inclusive and flexible workplace while everyone worked from home during the pandemic. In doing so, they brought a new role into the mix. In March 2021 Francine Katsoudas transitioned from EVP and chief people officer to chief people, policy & purpose Officer.

For many, the role of a purpose officer is new. Purpose officers hold their companies accountable to their mission and the people who work for them. In a conversation with Protocol, Katsoudas shared how she is thinking about the expanded role and the future of hybrid work at Cisco.

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Amber Burton

Amber Burton (@amberbburton) is a reporter at Protocol. Previously, she covered personal finance and diversity in business at The Wall Street Journal. She earned an M.S. in Strategic Communications from Columbia University and B.A. in English and Journalism from Wake Forest University. She lives in North Carolina.

Protocol | Fintech

The digital dollar is coming. The payments industry is worried.

Jodie Kelley heads the Electronic Transactions Association. The trade group's members, who process $7 trillion a year in payments, want a say in the digital currency.

Jodie Kelley is CEO of the Electronic Transactions Association.

Photo: Electronic Transactions Association

The Electronic Transactions Association launched in 1990 just as new technologies, led by the World Wide Web, began upending the world of commerce and finance.

The disruption hasn't stopped.

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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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