Cable Cord-Cutting Problem Seen As ‘Overblown’ By Media Execs At Goldman Sachs Conference

The pay-TV industry is facing record subscriber losses as more consumers cut the cord or choose not to hook up in the first place, but count AMC Networks and Scripps Networks Interactive among the media companies whose top executives say they aren’t all that worried about it.

“We don’t see the rate of acceleration increasing,” Sean Sullivan, AMC’s chief financial officer, said Thursday at the annual Goldman Sachs Communacopia conference in New York.

Sullivan was one of a number of executives quizzed about the unexpectedly high subscriber losses posted by cable and satellite companies at the end of the second quarter, a trend that has many investors worried about the long-term value of media stocks. As viewing habits shift, some analysts believe consumers will increasingly reject the traditional pay-TV ecosphere in favor of streaming video and on-demand services like Netflix.

Sullivan said AMC, whose flagship network produces some of the most popular shows on television -- including the perennial hit “The Walking Dead” -- is in a better position than most to weather the shifting winds. “Obviously we’re all monitoring the evolution of consumers’ viewing styles, et cetera,” he said. “I think we’re positioned quite well, even in a changing world like it is now.”

The AMC exec's comment echoed the “What, me worry?” manner of others who were asked about the issue, including executives from Time Warner Inc. and Comcast. Cord-cutting was the topic du jour at the annual confab, less an elephant in the room than a herd of elephants crammed into a falling elevator. The issue has received a mountain of media attention over the last year, but many executives say the picture is not as dire as some press reports would have us believe. Sullivan insisted that the cord-cutting problem has been “somewhat overblown,” and he wasn’t alone.

The Bundle Or Bust

According to Leichtman Research Group, 83 percent of American households still pay for TV as part of a traditional cable or satellite bundle, but that’s down from a peak of 87 percent five years ago. Combine that with reports of persistent ratings declines across much of the cable TV landscape, and it’s hard to imagine the arrow pointing in the up direction anytime soon.

Lori Hickok, chief financial officer at Scripps Networks Interactive, which owns HGTV and the Food Network, said the bundled model still offers an unmatched value proposition for channel owners.

“We really still believe that the bundle is an efficient place, and it’s going to be around for a long time,” she said at the conference. “I think it really comes down to putting compelling content on the air, being a must-have in the bundle, which I think we are.”

Scripps is perhaps less affected by cord-cutting -- at least in the short term -- because its target demographic is in the over-30 range. The company’s channels have experienced mixed fortunes over the last few years, with the Food Network struggling to attract viewers while HGTV has seen record-high ratings.

Hickok said it’s all more proof that the TV business is inherently prone to ups and downs, and the future can’t be written on the basis of a few downward-pointing arrows. “We shouldn’t look at one quarter and think it’s the end of the world,” she said. “There’s still a lot of opportunity to grow.”

Christopher Zara covers media and culture. News tips? Email me. Follow me on Twitter @christopherzara.