1 Trend That Exposes the Massive Vulnerability of Traditional Pay-TV Providers

DISH Network (NASDAQ: DISH) was one of the first companies to see the potential for streaming video to become a full replacement for the traditional cable bundle. The satellite TV company launched Sling TV at the start of 2015. Less than five years later, its subscriber count peaked around 2.7 million. The pioneering virtual multichannel video programming distributor (MVPD) lost 94,000 subscribers in the fourth quarter.

DISH isn't the only traditional pay-TV provider that's tried to offset traditional pay-TV subscriber losses with the introduction of a virtual MVPD. AT&T (NYSE: T) launched DIRECTV Now (which became AT&T TV Now) in late 2016. But it couldn't maintain momentum after ending its aggressive early promotions.

Meanwhile, technology has opened the door for new competitors to enter a market that previously required huge amounts of capital expenses just to get started. Hulu, which is now majority-owned by Disney (NYSE: DIS), and YouTube, the Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary, have both seen marked success. In fact, both are growing rapidly while the services from legacy pay-TV providers flounder. And there's no reason investors should expect the trend of technology-focused companies outperforming legacy pay-TV providers to end.

Source Fool.com