While the secular decline of traditional television in the United States is irreversible, it will not fall off an immediate cliff. S&P Global Ratings, the credit ratings group, says in a research note that it expects the pace of pay-television ‘cord cutting’ to abate. “We expect the decline will be a steady one that will take years to reach its final conclusion.”
Advertising will decline more precipitously than affiliate fees as audience ratings are eroding quicker than the rate of cord cutting. This trend is more acute for general entertainment networks, significant declines in audiences expected. Revenue from sports-based networks will hold up better but still decline.
“In our opinion, the path forward for the network TV business, whether part of a larger, diversified media company or spun off into a separate company, is to simply try to manage the pace of cash flow declines,” it reports. “We believe the companies only have limited ability to influence the rate of revenue declines.”
The report suggests that most media companies would prefer to prioritise spending on their growing online video services rather than for their declining traditional television networks. Instead, it expects them to focus on managing operating costs, including programming, to keep pace with declining revenues. Most legacy companies, it says, are in the early stages of cost rationalisation and expect to squeeze more cost-savings out of their traditional television businesses.
Comcast has announced that it intends to spin off some of its channels into a separate publicly traded company. Warner Bros Discovery has also announced plans to separate out its global linear networks business.
S&P observes that legacy media companies have a number of operational and execution challenges to address when spinning off their linear network television business. Untangling their historically intertwined production and distribution businesses will be complex.
Although the United States is most exposed to the decline of traditional television, S& suggests that other English-language markets are the most vulnerable, with the United Kingdom, Australia, and Canda only a few years behind.
The ratings agency says it would not be surprised if other major diversified media companies contemplate spinning off their cable network operations in the future.
“The media companies are in a no-win situation. Every day the companies hold onto their linear TV networks, they become less valuable,” it writes.
However, most media companies still depend heavily on the cash flow from their traditional television networks. This dependence will decline over time as online video grows in scale and profitability.
The decline of traditional television due to the internet is not a unique story, it concludes. Over the last twenty years, the media and telecom industry has had numerous subsectors go through secular declines, including wireline telephony, newspapers, and radio.
There were 140 million voice telephone lines in the United States in 2000 and just 40 million in 2022.
There were an estimated 24 million newspaper subscriptions in 2020, which was half as many as in 2000.
Pay-television video subscriptions peaked at around 100 million households in 2010 or 90% penetration. In 2025 that number stands at around 85 million households, although with growth in household formation penetration is down to around 65%.
In all these cases, the segments were replaced by something more functional or with cheaper delivery, but in all cases, despite steep declines in key operating metrics, these sectors still exist.