Telecom "Structural Decline" is Spreading
“Structural decline” of the market is not a phrase the provider of any good or service wants to hear.
Nevertheless, that is precisely what has happened in a number of segments of the communications business, including long distance voice, business and consumer voice overall, mobile voice and mobile texting.
Now we can add linear video subscriptions to the list. The Cabletelevision Advertising Bureau estimates that about 40 percent of third and fourth quarter TV ratings declines can be attributed to over the top subscription online video services.
Total TV viewing fell about 10 percent in the third quarter and about nine percent in the fourth quarter, according to an analysis of Nielsen data by Sanford C. Bernstein.
In the first quarter of 2015, so far, TV viewing appears to be down about 12 percent, according to Bernstein estimates.
“We believe the U.S. television industry is entering a period of prolonged structural decline, caused by a migration of viewers from ad-supported platforms to non-ad-supported, or less-ad-supported platforms,” wrote Bernstein analyst Todd Juenger.
The only “legacy” business that has not yet reached saturation, and begun to decline, is high speed Internet access. And some would argue that is because it is a “new” product line.
But high speed access will eventually become saturated as did the earlier products lines. That is why the search for big new revenue streams is so important, and why some believe industry regulation should aim to foster growth, not damp it down.