This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Channel Choice Could Crush Cable

This column was originally published on RealMoney on Nov. 29 at 9:37 a.m. EST. It's being republished as a bonus for TheStreet.com readers.

Just when I thought it couldn't get worse for cable, suddenly I am given choices? You have to be kidding me. Is the Federal Communications Commission really going to show that much muscle and make the cable companies unbundle channels and packages? Choice is the killer for Comcast (CMCSA - Get Report) and Cablevision (CVC - Get Report) and Time Warner (TWX - Get Report).

Of course, they tell you that people love choices, just love them. When I interviewed Brian Roberts for Philadelphia Magazine last year, he emphasized over and over again that what mattered was choice, that people loved to pick among lots of different offerings.

But we all know the truth. There's lots of stuff that we want, but there is much more stuff that we don't want that we have to pay for. On my dial at home, for example, from channels 15 to 37, I have bubkes, a bunch of Spanish and Korean stations and a massive amount of shopping channels. How much would I pay not to have them between the shows that I really want? And the only choice that I actually can't live without -- the NFL package -- isn't even offered on cable.

Remember why we liked cable stocks: The companies could raise rates at will and had a virtual monopoly. Now they no longer have that control, and if we can pay for only the channels we want, if we can get unbundled cable stations, the cable bill will drop to a level that will make the cash flow of these companies a frighteningly unpredictable element.

Now, I know that the buyback that Comcast has kept that stock from being crushed here, and I know that Icahn has kept a bit of a premium to Time Warner. But if the FCC allows this to go through, I can't understand why I would even want to be in the cable business, let alone own the shares.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CMCSA $62.41 0.00%
CVC $28.22 0.00%
TWX $88.04 0.00%
AAPL $121.30 0.00%
FB $94.01 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs