Cord cutting is real: Pay TV is losing subscribers

By on November 18, 2010, 4:17 PM
While the cable industry continues to argue that cord cutting, the term used for people canceling their cable subscriptions because they can find the content for free or for less online and via other means, isn't real, a new report is confirming the contrary. It turns out that cable lost more than 500,000 subscribers last quarter but not outright, because many customers switched to satellite and IPTV providers. Nevertheless, the pay TV sector still managed to lose subscribers overall, according to research firm SNL Kagan.

Specifically, cable operators lost 741,000 basic video customers in Q3 2010, which is the "the largest single dip for cable since the research firm began compiling data for the segment in 1980." The phone industry added 476,000 customers in the third quarter. Thus, the pay TV sector lost 119,000 subscribers overall: those remaining users most likely moved to the Internet. Cable is falling on the wayside as services like Netflix and Hulu continue to expand their offerings.

Most cable providers continue to deny the existence of cord cutting, arguing that it has yet to have any noticeable impact on subscriber numbers. Others argue that pay TV providers will be the last to admit to the phenomenon as they don't want to scare investors or lead more customers to consider ending their service. Cable companies are blaming the poor numbers on the weak economy but instead of embracing the Web, they're merely raising prices for remaining customers.

"Operators are pointing to a continuation of the forces that pushed subscriber gains into negative territory in the second quarter, including the weak economy, high unemployment and elevated churn of former over-the-air households," Ian Olgeirson, senior analyst at SNL Kagan, said in a statement. "However, it is becoming increasingly difficult to dismiss the impact of over-the-top substitution on video subscriber performance, particularly after seeing declines during the period of the year that tends to produce the largest subscriber gains due to seasonal shifts back to television viewing and subscription packages."





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TomSEA TomSEA, TechSpot Chancellor, said:

I would cut off my cable in a nano-second if I could get the sports feeds I want.

Emil said:

TomSEA said:

I would cut off my cable in a nano-second if I could get the sports feeds I want.

Doesn't Xbox offer sports TV?

princeton princeton said:

Why would you switch to satellite? Maybe it's just canada but here Cable is superior in EVERY WAY. It has no downfalls satellite doesn't have.

TomSEA TomSEA, TechSpot Chancellor, said:

"Doesn't Xbox offer sports TV?"

Well, first of all you have to have an XBox and I'm a PC gamer.

Also, I'm a fan of several different college and pro teams and so far, there's no online equivalent to see those teams compared to what I can get with cable. And in the condo where I live, we aren't allowed to have satellite dishes, so I'm stuck with cable.

mystic420 said:

I guess you could say I was WAY ahead of the times... I haven't even owned a TV in the last 5 years... If it's not online it's really no big deal to me... IF and I do mean "IF" the cable company's would finally break up the channel groupings and sell the customer only what they wanted at a fair price they would get a lot of those customers back. The internet isn't going away so they will have to adapt or die... I myself will never go back to cable or sat. TV...

vangrat said:

I would cut off our satellite connection for internet, however, Hulu and Netflix are not on the books here in Oz...HINT HINT!

Guest said:

Four months ago a friend of mine posted on facebook how he dropped his cable subscription and only kept the internet portion. Since his post, eight others including myself have done the same. Four more of my friends are waiting till they can get the sporting events they want to see on the internet. I'm curious if my group of friends is just an anomaly...

Kibaruk Kibaruk, TechSpot Paladin, said:

The same here, I dont actually watch tv for at least a couple of years (Maybe more). Online feeds among others are the way to go.

negroplasty negroplasty said:

Good. It's about time. It's beyond me why people are so willing to fork out a subscription to be spoon fed ads every 5-10 mins. They dug their own grave and are continuing to do so by charging such a high subscription fee. Internet video all day.

Nima304 said:

I would cut off my cable in a second if I could stream as quickly from the internet.

BlueDrake said:

They whine and moan privately, that people are cutting the cable and switching. Yet in public they say nothing is wrong, except all they do is raise prices. Even with Sat, prices I've seen go up at times. Without warning no less.

I've dropped my sat package, years ago because I was overcharged for almost nothing good. Just commercials galore, is all I can see every time watching things. Why do you think I pulled the plug ages ago? Then they rage on about torrents, and how they make a huge impact on things too. Well I for one want them to bring back shows, that actually were enjoyable years ago!

Sorry anyone who loves these pointless shows, the whole range of shows are rehashed too much. Bring something actually worth watching, and I might consider actually watching TV again. Other than that, I'll go download all my old cartoons and such again thanks. Too much money spent on things, that we never want to see in the first place. For barely many channels at all + PVR (since I'm away) it was about $90-100 a month. Sorry guys but that's too much IMO, even cutting back to bare basic channels is too much.

Literally no point sticking around, with cable or sat if nothing worth watching anymore by commercials. You watch pretty much 9 minutes per 30 minute episode, in commercials alone I find. All in the name of a dollar huh? Count me out, I'll wait to find things online instead.

Guest said:

mystic420

on November 18, 2010

5:35 PM I guess you could say I was WAY ahead of the times... I haven't even owned a TV in the last 5 years... If it's not online it's really no big deal to me... IF and I do mean "IF" the cable company's would finally break up the channel groupings and sell the customer only what they wanted at a fair price they would get a lot of those customers back. The internet isn't going away so they will have to adapt or die... I myself will never go back to cable or sat. TV...

Amen

anguis said:

As soon as a respectable sports package is offered somewhere online, I will have to keep my cable TV subscription. That's the ONLY thing keeping me from ditching it.

jwdR1 said:

Let's see, pay $40-100/mo. for a package of channels, most of which I don't want or watch. Or pay $20-40/mo. for 2-3 on-line services and stream only what I want.

Mmm. I don't know what to do.

Maybe the providers should stop fighting ala carte programming and start giving their customers what they want.

Zilpha Zilpha said:

It's the prices. A basic package in my area is over 60 bucks - way more than I am willing to pay to watch one or two shows twice a week. Besides that, other forms of entertainment such as online gaming are starting to fill the void, and most networks are broadcasting their shows online now.

The cable companies dug their own graves by upping prices over and over again without really changing the service. People aren't going to pay more when they can get better choice for less.

TuesdayExpress said:

TomSEA said:

I would cut off my cable in a nano-second if I could get the sports feeds I want.

This, exactly. With ESPN3, I can get my college sports fix but thus far there's no legit online source for real-time NFL. Once that gap is filled, I'll be going streamed shows all the way.

Guest said:

I actually sat down and tried to figure out how I could reduce my cable bill, but I had the absolute minimum package w/ HD & DVR, so I couldn't. If I could get live HD sports coverage (so essentially the big 4 plus ESPN), I'd ditch cable in a second and build a cheap home theater PC to hook up to my HDTV.

@Emil: The XBOX/ESPN thing isn't live sports as far as I know and doesn't include NFL games. It's freaking amazing otherwise, especially if you're a soccer or college football fan.

Guest said:

$100+ a month for hours of commercials and channels of language I don't understand? I cut the cord months ago. Pay $15 a month for internet using PS3 and Torrent for my PC I can watch anything I want including the NFL games and basket ball live or recorded. Movies, tv shows...

invest that money you would be giving to TWC or Cox into a PS3 and a external drive for downloads and save a thousand bucks a year easily.

TV's now come with WiFi using the Google TV apps along with many other freebies and is only going to get better.

Who really watches those lame sitcoms?? nothing but garbage and commercials, why should we have to pay to see commercials??? I would rather pay another $30 NOT to see commercials...

Tedster Tedster, Techspot old timer....., said:

My cable bill is F-ing outrageous. It is about $145 for 3 tvs. I only have extended basic service. I wish I go go satellite or Fios, but neither is an option for me. I live in an apartment and FIOS is not offered in my area.

Guest said:

I cut the cord 15+ years ago and haven't looked back. I live in suburbia and get broadcast with a small amplified antenna. We watch a few shows via internet. As long as I can get PBS, I'm OK.

vipor231 said:

my bill is $153 a month with all 3 services including phone and internet,im on a deal for like 2 years but when that deal ends im done with cable

Guest said:

Mystic420 you just nailed it. I'm doing almost the exact same thing you're doing. I'm tired of paying for channels I never watch and having to pay a higher rate to watch non-subscription channels that I do want to watch. The politicians used to look after the country and not allowing the cable companies to screw the viewers but I guess the politicians are now "employed" by the cable companies.

jjbeard926 said:

The way to stop hemorrhaging cash is rather simple. Pay-as-you-go cable. TV in general is very 20th century. Meanwhile services like Hulu, iTunes, and Netfilx work for the modern day because you get only what you want, in many cases exactly when you want them.

So cable needs to wise up and offer the option of entirely pay-per-view TV or they need to offer TV stations al-a-carte instead of in bundles. If I could just have the stations I want and pay a few bucks per month for each of them that starts to look really attractive to me. Suddenly instead of having to pay $60+ a month for a bunch of stations I don't want (and only getting one or two that I do want) or worse (in my area to get the stations I want would cost over $120/month and I'd only use about 5 stations while not ever viewing the other 170+) I'd be looking at paying $20/month for the 5 or 6 stations I actually want. Now to make that profitable you add a $10/month charge just for the digi box and a $20 install fee, etc, etc. But still I'd be paying $30/month and actually get the programing I want.

The amount per subscriber would be less but the number of subscribers would increase by a lot. It can be done without a lot of added cost to the cable providers either, they can use existing cable boxes, existing billing systems, existing offices, almost nothing new.

In the future though they'll need to get even more like Hulu and iTunes streaming on demand content and live TV will become a museum piece like the phonograph and the quill pen.

gobbybobby said:

wow you Americans pay loads for TV. You can get Sky 3d or HD with 800 channels 20 meg broadband and free calls for 65GBP, or if you don't want movies and sport much less than that. Here in the UK cable is terrible, there are few services the biggest being Virgin and even then its not cable like in the states its just TV running over the internet the required bandwidth kept seperate from you Normal broadband so downloading does not effect the TV stream.

Sky is by best far, even when I leave my parents I have a sky TV account linked to their account so can watch a lot of channels and on demand stuff on Xbox and Skyplayer on any windows PC.

Guest said:

For me cutting the cord is not the money. I cut the broadcast cord as well. TV has degenerated into nothing but filth and perversion, commercials, and government propaganda. I want nothing to do with it.

Guest said:

Aren't you lot answering your own question? Eg If I could get only the stations I want I would be paying 30 per month instead of 60,75. whatever. The whole cable tiers thing was worked out years ago to milk the most amount of money out of people as possible. Its starting to come apart now, Personally I dont know why the Tv stuff is available on-line, surely they are cutting their own throats? If its downloaded illegally they can and will take action, but when its from Hulu etc then ???

No-one ever says I want a shake-up in the cable industry so I can pay MORE. Perhaps the whole networked cable thing is starting to crack and this is just the first few tears and rumblings coming from the Dam, before the deluge of Internet Tv takes over.

DO you really want Microsoft smelling up your Telly-Box?

Tedster Tedster, Techspot old timer....., said:

I have no problems with microsoft. They put out good products usually and charge a fair market price. Microsoft has nothing to do with the subject of cutting cable service. Cable in the USA is a monopoly and charges exorbitant prices. If you live in an apartment, like I do, there are little to no alternatives.

Guest said:

How long until the free programs online are questioned as you watch yor ISP prices creep upwards. The meaning of free is turning into how cheap is it.

peas said:

Also, I'm a fan of several different college and pro teams and so far, there's no online equivalent to see those teams compared to what I can get with cable. And in the condo where I live, we aren't allowed to have satellite dishes, so I'm stuck with cable.

Just goto ESPN3.com to watch many of the college & pro games for free. Admittedly it's difficult to get all the games, but it's shifting and soon I bet they'll all be available online (probably as a subscription service).

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