Cutting the Cord, American Snipping Cable - New TeeVee Reports Half a Million Cut in Q3 Alone

Posted by Richard Kastelein in Writers on November 06, 2010  |  2 Comments More from this author  |    |  Follow Richard Kastelein on: Facebook | LinkedIn | Twitter | YouTube

Not only are our friends at NewTeeVee reporting the ax wound with US cable bleeding, 500K+ Subscribers Lost In Q3 - but Steve Rubel, VP of the world's largest PR firm Edelman - also quoted some interesting analyses recently showing that Big Cable is in Big Trouble. With some 13% of Americans intending to pull out the scissors to cut the cord in the next 12 months, according to a report from Strategy Analytics - a market research firm. ABC is also reporting similar dire symptoms. And the tanking US economy is not helping according to the NYTs.  Cable is not cheap.

Let's start some excellent reportage from By Ryan Lawler at NewTeeVee:

There’s now even more evidence that subscribers are cutting the cord and opting out of paying for cable: By adding up subscriber losses from four of the top five cable companies, we found that more than half a million users have ditched their cable companies.

The carnage began last week when Comcast announced it had lost 275,000 basic cable subscribers, but it has continued as Time Warner Cable, Charter Communications and Cablevision have all reported major subscriber losses of their own.

No. 2 cable provider Time Warner Cable announced today that it shed 155,000 cable subscribers during the third quarter, which included 46,000 digital video subs. Yesterday, Charter Communications reported that it lost 63,800 basic cable subscribers during the previous quarter. And Cablevision said this morning that it shed 24,500 subscribers during the same period, including about 5,000 digital video subscribers.

Add that all together and you have more than 500,000 customers that left their cable providers last quarter, and that’s just data from four of the top five cable companies that have reported earnings. (No. 3 cable provider Cox Communications is privately held and therefore doesn’t have to announce its subscriber losses for all the world to see.) No doubt even more subscribers have left some of the smaller, non-public local and regional cable providers over the past few months.

Rubel reports some even more grim news for the puppetmasters of primetime:

Digital primetime is here. Madison Avenue should be giddy with excitement. Hulu served nearly 800,000 ads in July, comScore reports. What's more, the proliferation of interruptions are not stopping Hulu users from watching an average of 2.6 hours of video per month.

But there are potential challenges ahead as Xbox, Netlfix and Hulu supplant the TV nets as the new kings of primetime.

For starters, as more Americans become "cord cutters" we may opt for ad-free on-demand rentals or all-you-can eat subscriptions. The appeal is interruption-free viewing. Some 13% of Americans intend to cut the cord in the next 12 months, according to Strategy Analytics - a market research firm.

However, the more scary scenario is that all of this video consumption and cord cutting could push the Internet to a breaking point.

Or Dave Wieneke from Usefularts.us:

We are now among 2 billion people on the Internet. Have you noticed that we’re increasingly spending the bulk of our time on an ever-smaller handful of hub websites?

According to data from Compete in 2001, 30 percent of all Internet traffic went to the top 10 visited sites. By 2006, 40 percent of all traffic did. Today, that number is close to 75 percent. This is creating a set of networks that will be as powerful as broadcast television once was. And it’s reordering the media landscape.

"... Hulu offers a free service that lets viewers watch recent TV episodes with commercials. Recently, they added a $9/month premium subscription that offers more of the same: more shows, and yes, more ads. This has inspired subscribers to stay away in droves.  (Unlike Netflix, television networks are based on an advertising businesses model, which they desperately want to retain against Google.)

Further, one of Hulu’s owners is NBC, which itself is owned by cable firm Comcast.  Along with a committment to advertising, they may resist any deals that undercut cable as a means for getting video to screens.  I agree with Fast Company that this would be a great time for Netflix to buy Hulu. But an outright sale of Hulu could be the end of television’s best shot to keep advertisers in the digital medium. Its hard to imagine Comcast, a tenacious and occasionally insane competitor, making a deal that would so radically change its core business."

And he's right. As we previously reported at Appmarket.tv, Netflix is growing leaps and bounds, in planning a streaming only service to Canada, is already sending the Great White North's players into a monopolistic frenzy. Never mind the US where Netflix is already eating up - allegedly - grabbing 20 per cent of all peak time bandwidth traffic according to Cnet as Mark Cuban reported.

And not to mention - Samsung, Sony, LG, Panasonic, Sharp, Toshiba, Philips, Loewe, and Vizeo - all CE manufacturers - are all shipping TV's that suck bandwidth in 2011. And then there's platforms such as HbbTV and Youview in Europe and Korea and Hybridcast in Japan - that also promise to chomp the broadband wire even more.

No wonder Google is buying up and building all the fibre networks behinds the scene.

They who own the pipes will own it all in the end. Wimax on wireless, Fibre optic for the pipes.

From Kevin in Texas, A commenter at NewTeeVee:

It’s interesting – here in Texas there has been no inflation for nearly 3 years now, which lead my employer to not give cost of living increases during this time – yet my satellite bill (DirecTV) kept increasing. It hit $130 and we decided to cut the cord ourselves. It’s ridiculous that so much of our money should go to our “TV” bill… I’m much happier with Netflix + Hulu Plus + TIVO giving us a grand total of $35 or so…