The American pay-TV industry as a whole has had an overall drop in subscribers for the first time. But even if it’s evidence of “cord-cutting,” the firms involved haven’t really lost out much.
There have been a few cases before where individual cable firms have had a quarterly decline in pay-TV subscribers. Now Leichtman Research Group has put together figures for the major cable and satellite firms (covering 94 percent of the industry) and believes the overall figure dropped by 104,521 last year. Of course, that’s only a tiny proportional drop, but generally you’d expect the figure to be rising simply through population growth.
The pain isn’t evenly spread. Satellite providers and phone companies such as AT&T and Verizon had a big overall rise, while traditional cable as a whole dropped 1.7 million customers. Would-be partners Time Warner & Comcast took the biggest hit with declines of 825,000 and 305,000 subscribers respectively.
People haven’t given up spending money to be connected, however. The total number of broadband subscribers rose by 2.6 million last year, with both Time Warner and Comcast picking up new customers. In Comcast’s case it more than wiped out the TV customer losses.
On the face of it, the figures don’t provide much evidence of a direct “cord cutting” move of people cancelling pay-TV subscriptions because they can get their video fix (legally or otherwise) through the Internet. Indeed, a big part of the rise in broadband appears to have nothing to do with television and is instead the result of “dial-up neighborhoods” getting affordable broadband access for the first time.
Instead the move to online video may be less about existing customers ditching pay-TV and more about younger people who’ve grown up with the Internet leaving home or college for the first time. It seems likely a significant proportion of that group, whether through technological preference or limited budget, is deciding right from the start that online video services — including those through game consoles and other gadgets — are all they need.
(Image credit: Wikimedia Commons user Kolossos via Creative Commons license)