With companies like Samsung releasing television sets such as this massive 4K one in the picture above, you wouldn’t think that cable television was in a downward spiral. The truth is, the cable television industry is still large and in-charge, but more people are cutting the cord than ever before. Month after month, cable companies are losing subscribers. Where are they all going?
According to a report from SNL Kagan, the U.S. market lost close to 1.8 million cable TV subscribers in the last 3 months alone (Q2). This doesn’t denote significant change yet, but it does bring us closer to an upcoming tipping point where cable television subscriptions (and their 33% commercials) are a thing of the past. In the same report we can see a more significant change in internet service subscriptions nearly doubling from 9.7% to 17% while cable TV took a 7.4% dive from 2009 to 2012.
Another analyst and possibly one of the most renowned in the country, Craig Moffet (founder of the MoffetNathanson) looked at statistics from the past 12 months and concluded over 900,000 homes in the U.S. cut the cable. He is quoted stating “Cord-cutting used to be an urban myth, it isn’t anymore.” But one could easily rephrase that to say, cord-cutting used to be for the technologically adept, but it is becoming more mainstream.
“This marks the first time there
has been a net industry-wide subscriber
loss over a four-quarter period (since
LRG began tracking the industry over a
decade ago).”
Compared to just last year, this is a huge increase in the number of subscribers lost. The Leichtman Research Group reported that in 2012 only 325,000 subcribers cut the cord.
So let’s think about it again? Where do all of the cable TV subscribers go? There isn’t a definitive answer by the analysts quite yet. But my bet, which goes along with LRG’s findings, is that people are turning to other sources for entertainment. Nearly half the population has an iPad or Android tablet with Netflix, Amazon Prime Streaming, or Hulu available. Even YouTube has movies now. Others have television media streaming devices like the Roku or Apple TV. The decrease we’re seeing in cable television subscriptions may just be the result of increased alternatives that are easy to set up and use.
Keep in mind that cable TV is still a long ways from phasing out. In the U.S. alone there are over 94 million subscribers still paying for service, and that is a big chunk of money pie at the average price of $34 per month.
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Isaac Groupon
I gave my television cable subscription years ago. I started with an Xbox and XBMC and now I’m using a smart TV that’s hooked up to one of my PC’s.
I stream everything. Sports, music, TV shows, movies.
I haven’t been to a movie theater in years. I haven’t bought a movie in years. If I want to see something that isn’t on Netflix I’ll rent it from Amazon for $2-$3 and watch it on my 60″ television while eating homemade popcorn with real butter, not the cottonseed/soybean oil crap at the movie house.
The best part is no commercials. No advertisements. I watch what I want to watch.
Brian Burgess
I am a proud cord cutter. I haven’t had cable or Dish for about 10 years. I live out in the sticks, and I do get one channel — Fox and that is the one I do actually watch, but only during MN Vikings games.
Everything else is streaming via Netflix and other services via Roku, Xbox 360 and sometimes Apple TV.
Joe
Until there’s something that streams Fox News, I can’t see myself cutting loose. But, and maybe I just need things broken down a little, I don’t understand the significant savings with cutting cable. The way these companies are bundling services, you don’t wind up saving a whole lot wit letting go of cable. It’s like the concept of buying a smart phone outright versus taking a contract. You can plunk down more than $600 for a smart phone, but then you’re still paying the monthly bills same as you would have if you had paid $200 or $300 for the phone under contract. I get that you can always cancel your account and go somewhere else, assuming the phone is not locked and works with the other carrier, In general I need a little schooling on the long-term savings of sacrificing some services.
Austin Krause
Good point Joe. I think a lot of people probably feel the same way.
Regarding the cell phone contract vs. prepaid there’s a really good article on it that I wrote over on groovyAndroid here:
http://groovyandroid.com/save-money-switching-prepaid-126/
I’ll have to write up something similar for cutting cable. I’ve been doing a lot of math on this recently as I’m about to move into a new residence that has access to FIOS and several other ISPs all trying to sell a bundle. My findings so far with just Verizon alone was that I can save $40+ per month by opting for Internet only. Over the two year period that they want for a contract it comes out to a savings of $960 – which is enough to buy a new TV and a completely new media center for streaming, or a new computer.
There are services popping up all over like https://aereo.com/ which allow you to watch local TV channels over the net. And then there’s always just going out and buying a large digital antenna and picking up the broadcast because things like Fox News aren’t considered premium cable subscriptions.
Joe
Excellent. Your cell phone plan explanation made sense. I look forward to something similar for cable, if and when you have a moment to write it up.
Dave
Hey Austin – I could not agree more. Aero is looking extremely promising, but until it is offered in more locations, most of us are left wishing… What I would suggest though to your readers is that they take a look at Indoor or Outdoor Antennas. You can get HD programming for free, from all the major network stations. And for me that means Sunday Football. Hope that helps,
Dave – KilltheCableBill
Dale
Roku has Fox News.
Cancelled Comcast after they charged me $2 to cancel a movie channel.
FairPoint has fiber and it’s been working great.
Cable bill from $185 to $85 (I need a phone for my house alarm).
eddie stinson
I’ve had cable and satellite services for decades and have finally made the decision to cut the cord. However, I must say, while I have had countless TV’s and video recorders nary a one has ever come close to a fox.
Joe
Hi, I don’t get it. Sorry for my ignorance here, but what fox are you referring to? :)
Brian Burgess
Another thing to keep in mind with cutting the cord is that if you subscribe to several services, you might end up paying just as much as you would for a basic cable package, so choose judiciously.
Still, the ability to watch what you want, when you want is a huge benefit…plus no annoying commercials – unless you subscribe to Hulu Plus — still, there’s fewer commercials with it too.
There are Fox News streaming channels. For instance on Roku there is a live streaming Fox channel that streams from 9am to 3pm. It’s not the full production, but allows you to get the news. There’s also plenty of on-demand Fox stuff.
Also, Wall Street Journal, Huffington Post, and Bloomberg all have live streaming pretty much 24/7.
eddie stinson
Given the fact they use public airwaves, I remain convinced it is illegal for them to be able to refuse to sell a channel ala carte. Another example of the government protecting profits before people………