Time Warner (TWC) fell sharply Monday following a weak third-quarter report. The main reason for the weak quarter was the continuing demand for the cable company's video services.
The company lost 140,000 video subscribers in the quarter. If this were an isolated event, it would not cause much concern considering how big the company is, but it is not isolated. Time Warner’s main competitor, Comcast (CMCSA) is also seeing falling video subscriber numbers.
What we are seeing is a major shift by consumers toward streaming video. People are fed up with the high prices charged by cable providers, and are finding it easier and cheaper, to drop their service and turn to streaming.
Companies like Hulu and Netflix (NFLX), combined with a good TV antenna, make it very easy to meet all of you television demands. Unless big cable companies like Time Warner start to lower prices, you can expect to see more migration from cable to streaming.
Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va. His articles typically cover big-picture events and forecasting what impact they will have on the stock market. In addition to writing for Fresh Brewed Media, Michael also wrote for AOL's BloggingStocks for three years, focusing most of his attention on the energy and technology sectors.