Cable providers worried about impoverished Americans, not Netflix

By on June 15, 2011, 5:42 PM

Although we've seen endless reports about how Netflix and other on-demand Web video services are kicking conventional media in the pocket, cable companies don't seem particularly alarmed. During the annual industry event "The Cable Show," executives from Comcast, Time Warner, News Corp. and other conglomerates claimed that they are more concerned about poverty-stricken Americans.

According to Viacom CEO Philippe Dauman, cable television is one of the last expenses people cut when the going gets tough, but a growing number of customers are being forced to cancel their subscriptions to scrape by. "There clearly is a growing underclass of people who clearly can't afford [cable]," said Time Warner Cable CEO Glenn Britt. "It would serve us well to worry about that group."

Considering how liberally cable providers jack up their rates, it's no surprise that subscribers are jumping ship. "That has been a wonderfully attractive model for a generation, but the danger, of course, is that eventually the video product will be priced into irrelevance for lower income consumers," said analyst Craig Moffett. "I don't know when it will happen, but I suspect we're already perilously close."

There has been plenty of debate about how much Internet-based competition is affecting conventional media channels, and we've yet to see a definitive answer. Nonetheless, there's no denying that cord-cutting is a real phenomenon -- if only a small one -- and Netflix is undoubtedly playing a role. In April, the company tied Comcast for total subscribers and reported an 88% profit increase on-year.

Just this Monday, The Diffusion Group published a study that concluded 32% of Netflix users are thinking about downgrading their pay TV subscription in the next six months -- up from 16% last year. A recent poll by Roku found that some 15 to 20% of its customers planned to cancel their cable or satellite TV services and rely solely on Web video. Have you kicked your cable provider to the curb?




User Comments: 28

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howzz1854 said:

i've long switched to over-the-air HDTV (or DTV) solution, combined with Net based solution like netflix and Hulu. i don't know why the rest of the country is still so far behind willingly throwing their money to the cable companies. the amount of money you can save is disgusting. conventional cable solution is really a wasteful business model for Americans if you look at it.

howzz1854 said:

btw, the amount of money some people pay for their cable service amounts to buying a car. just think about it.

yRaz yRaz said:

Yeah effing right, tell that to my $220 cable bill. I'd drop it in a second if it wasn't part of the terms of my "living conditions."

gwailo247, TechSpot Chancellor, said:

I have to pay $10 a month for having a cable modem, and no cable. Subtle.

tw0rld tw0rld said:

I dropped comcast a month. I am now using online services such a hulu(free), netflix, Boxee, justin.tv among others. The only thing I miss is live sports.

Guest said:

The last time I had cable was 2001, when it was free (Thanks to my neighbors). After moving and not having cable for the last 10years I couldn't be happier. I spend less time watching pointless crap, more time reading and I'm rarely exposed to crappy ad's. I can't stand being around TV's anymore they are just such a waste of time, and energy.

Raswan Raswan said:

I love how people rush to be the first to claim they cut the cord so much longer before anyone else even thought of doing it that they should be given the crown to the universe. "I haven't paid for cable since 1933." No one cares about you. "I don't watch TV anymore" has for years been an underhanded way of saying "I'm so much more enlightened, intelligent, and zen than you it's laughable." I, for one, love tv, and if I could talk myself into going back and paying $140/month for hd cable and a dvr, I'd do it in a second. But netflix does a passable job of serving my needs, so I'll stick with them. I just wish someone else would tell people to quit it with the holier-than-thou bs. You all just look like a bunch of @sses.

gwailo247, TechSpot Chancellor, said:

Raswan said:

I love how people rush to be the first to claim they cut the cord so much longer before anyone else even thought of doing it that they should be given the crown to the universe. "I haven't paid for cable since 1933." No one cares about you. "I don't watch TV anymore" has for years been an underhanded way of saying "I'm so much more enlightened, intelligent, and zen than you it's laughable." I, for one, love tv, and if I could talk myself into going back and paying $140/month for hd cable and a dvr, I'd do it in a second. But netflix does a passable job of serving my needs, so I'll stick with them. I just wish someone else would tell people to quit it with the holier-than-thou bs. You all just look like a bunch of @sses.

Below me. Nobody here is saying they don't watch TV or any other media, we're just saying that paying $150 for 200+ channels of crap is not worth it anymore.

But please explain to me what the hell crab fishing has to do with history?

I still watch plenty of TV shows and movies, I just don't watch them via cable.

Sounds like you quit cable too, so what the **** is the point of your post?

Relic Relic, TechSpot Chancellor, said:

While they may be saying this publicly, consistent rate hikes in monopoly/duopoly areas paired with the idea and execution of low caps/fees in an age where costs are dropping seems to indicate they are worried about internet video cutting into their bottom line.

howzz1854 said:

Raswan said:

I love how people rush to be the first to claim they cut the cord so much longer before anyone else even thought of doing it that they should be given the crown to the universe. "I haven't paid for cable since 1933." No one cares about you. "I don't watch TV anymore" has for years been an underhanded way of saying "I'm so much more enlightened, intelligent, and zen than you it's laughable." I, for one, love tv, and if I could talk myself into going back and paying $140/month for hd cable and a dvr, I'd do it in a second. But netflix does a passable job of serving my needs, so I'll stick with them. I just wish someone else would tell people to quit it with the holier-than-thou bs. You all just look like a bunch of @sses.

maybe because you got burnt and now can't afford the high cost of cable, and the bug has been itching for some despearte shows that you can't get. i don't know.. i don't pretend to know what you do with your money or how you do things. all i know is.... that is a lot of money for very little you get back. No matter how you look at it, financially (return on investment), or practically (benefit in your life). it is becoming an obsolete business model, and the industry is going through a change. it's just the questions of how much longer will the conventional cable business model linger on.

tonylukac said:

I just spend some of my tv time reading Techspot.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

I wouldn't mind having strictly PPV. Blank screen until a decision has been made about what will be watched.

I couldn't care less about all the channels that everyone considers crappy and never watch. Seriously if no one watches them, where do they get their money to air? I know I don't want to be a part of helping the stay on the air, if I would never even consider watching them.

KingCody KingCody said:

Depending on where you live, some people get screwed much worse than others when it comes to their cable bill.

Where I live (metro Boston, MA), I have the choice of FiOS, Comcast, RCN, or satellite. Due to competition, prices stay lower than many other areas. I currently have FiOS and pay $92/month (with no contract) for "HD Extreme" TV and 20Mb/s internet. I do subscribe to Netflix and use it quite often, but I still enjoy live TV and have no problem paying for it. (I save plenty of $$ in other ways ).

I have family in NH where their only choice is Metrocast or satellite. They have Metrocast and pay about $180/month for "expanded basic" cable TV service and 5Mb/s internet. I get more than double the channels and internet speed at around half the price.

If all you watch are sitcoms/series, than you can probably get away with Hulu Plus as a "basic cable" replacement, but if you like to watch live sports games or educational/documentary style channels, then cable is still required. NetFlix is certainly not a suitable replacement for cable TV service, but it definitely beats paying ridiculous rates for "premium" movie channel subscriptions.

Tekkaraiden Tekkaraiden said:

I've be cable free for about 5 years, downloading and now netflix fulfill most of my tv watching needs. When I need a cable fix I watch some tv at a local university while I'm working.

Guest said:

I guess cable subscription is very expensive in America and so they decided to cut the cable connection at their homes and provide more versatile video viewing by these online service providers. Here in India the prices of cable TV is not so highly priced and hence every home can afford one

Raswan Raswan said:

gwailo247 said:

Raswan said:

I love how people rush to be the first to claim they cut the cord so much longer before anyone else even thought of doing it that they should be given the crown to the universe. "I haven't paid for cable since 1933." No one cares about you. "I don't watch TV anymore" has for years been an underhanded way of saying "I'm so much more enlightened, intelligent, and zen than you it's laughable." I, for one, love tv, and if I could talk myself into going back and paying $140/month for hd cable and a dvr, I'd do it in a second. But netflix does a passable job of serving my needs, so I'll stick with them. I just wish someone else would tell people to quit it with the holier-than-thou bs. You all just look like a bunch of @sses.

Below me. Nobody here is saying they don't watch TV or any other media, we're just saying that paying $150 for 200+ channels of crap is not worth it anymore.

But please explain to me what the hell crab fishing has to do with history?

I still watch plenty of TV shows and movies, I just don't watch them via cable.

Sounds like you quit cable too, so what the **** is the point of your post?

I was actually talking about posters like howzz, and, to a lesser extent, Guest 1. I usually get a kick out of your smarmy posts gwailo, but it appears the undies are wound a little tight this evening

My point is that any and every time Netflix or hulu or whomever gets mentioned, even tangentially, the only thing anyone has to say about it is "have you cut your cable yet?," to which it seems people feel forced to answer, in one nauseating, palimpsestic variation or another of--so as not to be labeled a drone--"I haven't even had a tv since 1993. Who pays for programming anymore? Secretly I watch whatever the **** is one when I get home from my boring job and plop my fat ass down in front of the screen, but publicly I want you all to think I'm a technohipster so far ahead of everyone else that I was boycotting tv before I even started watching it, so take that."

How about someone (looking at you techspot) try to instigate some sort of original discussion about digitally streamed content and cable. Or do we need to keep having the same conversation, over and over? It's getting to the point where someone can write three one hundred and forty-character posts (for, against, and middle ground) based on the article's content and it hits the gist of every single post that gets made here...

And crabs have everything to do with history. Just ask a friend's mom how hers would have been different without them

Saintnsinner said:

I cut cable for two reasons. The expense and how little programing is worth a damn. Not to mention endless dumb commercials. I'll be happy to wait until the season box sets come out on Netflix. Keep fooling yourselves cable companies, right out of a job.

Guest said:

Commercials killed tv for me, and if it wasn't for adblock, i'd probably give up on youtube as well.

Guest said:

I've had and been paying Satellite since 1991!!

Guest said:

I live in a suburban area and get my channels from free over the air broadcasts as I've done for years. The reason I've done this is cable costs too much for the packages you get. If cable would ever go to pay per view ala carte model, where you only pay when you watch, I would consider it. Pay TV has too much junk included in the packages I can watch shows that are not on broadcast TV on the internet for free.

treetops treetops said:

We cut the cord last month and got netflex.

Wagan8r Wagan8r said:

What a lot of people are not seeing is that tons of people get cable MERELY to watch ESPN and their local sports teams. If ESPN was over the air, I'd suspect that more than half of the cable subscribers would cut the cord. The only reason why I havn't cut the cord is because I love to watch the Rockies live. If MLB TV would broadcast local teams live, then consider it cut.

Guest said:

I think they're simply a few driving factors that are leading the cable companies to worry. A few people have mentioned it in their comments. The monopoly/duopoly doesn't help one bit with prices. Here in New York City, depending on what part of the city you live in, you're stuck with one cable company who feels as if they can continue to raise prices because folks don't have a choice. The internet and internet videos (netflix, hulu, and such) are finally giving them a big eye opener. While I might be able to afford it, I don't see any reason as to why I should pay $100 ish for cable tv. Personally, I hate commercials and don't have time anymore to find myself sitting down and watching what airs, when it airs. I can also say that plenty are probably in agreement that there is only a limited amount of original new airings these days, the rest are completely repeats.

Another thing I believe that hurts the cable companies are cell phones as well. The majority of folks have cell phones which eliminate the need for a home phone. This cuts off another $30ish off people's cable bills which is nice. I simply pay for high speed internet, a nice 30 Mbp connection that I can do whatever I want.

RLJSlick said:

"worried about impoverished Americans" are you kidding me, every year, they raise the price of cable TV, I don't think they are too worried about that. If they are so worried then they should give basic cable for free, why not, then you're guaranteed to have subscribers. I rack my brain every year trying to find a way to dump cable.

Tanstar said:

tw0rld said:

I dropped comcast a month. I am now using online services such a hulu(free), netflix, Boxee, justin.tv among others. The only thing I miss is live sports.

And this is why I can't follow you there. Football (college and NFL) in particular.

Tanstar said:

Guest said:

I guess cable subscription is very expensive in America and so they decided to cut the cable connection at their homes and provide more versatile video viewing by these online service providers. Here in India the prices of cable TV is not so highly priced and hence every home can afford one

Every home in India can afford one? Maybe where they aren't starving :P

Saintnsinner said:

Excellent point, luckily I don't care much for watching sports on TV and it's definitely an added bonus for cutting cable. I think major league sports players are horribly over paid and I'm not financing that anymore. Except for the occasional college football game I couldn't care less about sports so why should I pay for that? Another good argument for al a cart programming/pricing.

Guest said:

Hate to break it to you guys but as Netflix Hulu and streaming video catch on cable will move to tiered packages in order to recoup the loss of video subscriptions so if you plan on streaming video the cable company wants their piece. You think for a sec youre gonna have unlimited data for 50 bux a month and get away without a basic video package

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