There has been no response yet from cable providers like Comcast Corp. (NASDAQ: CMCSA) and Time Warner Cable Inc. (NYSE: TWC) or telecom giants like AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ), but it is a pretty safe bet that there will be one.
Cable companies are losing subscribers to the video providers like satellite companies and telecom giants that provide wireless broadband service. Suggesting that they may have to get used to lower margins is rubbing salt into the wounds.
Cable subscriptions fell slightly in 2012, the first time that’s ever happened and the decline is continuing this year although at a slightly slower pace according to research firm SNL Kagan. AT&T and Verizon combined to add 400,000 subscribers in the second quarter of this year, while the cable companies were losing 607,000 subscribers. Even satellite providers Dish Network Inc. (NASDAQ: DISH) and DirecTV (NASDAQ: DTV) lost 162,000 subscribers in the second quarter.
What Iger wants the cable companies to do is sell more broadband services from which, he claims, they gain more profit. This will offset the larger licensing fees that Disney and other content providers like CBS Corp. (NYSE: CBS) now demand. And he’s pretty much got the cable guys over a barrel because without content they wouldn’t have any subscribers.
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