Business Take: Is Cord-Cutting a Threat to Cable?

The media love to write about cord-cutting, but is it actually happening and could it change how people watch TV?

May 11, 2014 at 7:36AM

The day after celebrating his 29th birthday Business Take host Jason Hellmann sits down with Fool contributor Daniel Kline to discuss Hellmann's decision to be a cord-cutter -- someone who chooses to not subscribe to cable. 

Hellmann and Kline kicked off the second episode of Business Take, the show that gives you the Foolish perspective on the most important business stories of the week, by examining whether cord-cutting makes sense and whether it's something that will actually impact the business of cable providers.

"I just don't watch live TV anymore," said Hellmann, who explained that subscriptions to Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN) Prime, and Hulu gave him more than enough to watch while over-the-air channels allow him to follow the National Football League and a $120-per-year subscription to MLB TV gives him access to every single baseball game aired during the year.

After a spirited debate on Hellmann's decision to not have cable and Kline's shock at how anyone could go without every possible TV option available, the two moved into the current reality of the cord-cutting movement. Kline explained that while cable subscriptions (a broadly defined term including satellite and phone company pay television providers) fell for the first time in 2013, cord-cutting has been more media speculation than actual practice.

"It's a youth trend," Hellmann said. "Anyone over the age of 45 is not doing this, but everyone I know has considered it."

Kline, 40, described himself as being in the tweener group age-wise that would consider cutting the cord, but finds that while it's possible to get most content, you have to go too many places to do so. He cited Amazon's Fire TV as a possible source of making disparate streaming content easier to navigate and manage.

"Fire TV is voice-activated.... You can say 'Brad Pitt' and it gives you every Brad Pitt movie, or you can say 'Fred Flintstone' and it brings up every option whether it's a rental from Amazon or airing on Kindle," Kline said. "At the point where a hardware device like Fire TV or some other service makes it so I can say 'Boston Red Sox' and it shows me that there is a game tonight or here is a DVD of the championship seasons ... that's when cord-cutting makes sense."

Have you cut the cord? Are you thinking about doing so? Share your thoughts on the subject in our comments section.

Daniel Kline has no position in any stocks mentioned. Jason Hellmann has no position in any stocks mentioned. The Motley Fool recommends and Netflix. The Motley Fool owns shares of and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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