The Cord Cutting The Pay TV Sector Keeps Saying Isn't Happening -- Keeps Happening

from the televised-revolution dept

Tue, Mar 15th 2016 6:32am — Karl Bode

Several cable operators managed to eek out some modest subscriber gains in the fourth quarter of last year, prompting some renewed claims by the industry that cord cutting was "on the ropes" or was otherwise an unfair hallucination of the media. After all, Comcast saw a net gain of 89,000 pay TV users during the fourth quarter. Time Warner Cable similarly saw its best year since 2006 with a net gain of 54,000 TV subscribers. Charter also saw a net gain in the fourth quarter of 29,000 video subscribers. For some of these companies, this was the best performance they've seen since 2006.

As such, cord cutting is clearly yesterday's news, right?

Not so much. Full analysis of the fourth quarter and full year numbers by analysts like Leichtman Research indicates that while cable operators might have had a solid fourth quarter, most of them still saw a net loss on the year. As a whole, the pay TV sector as a whole lost 385,000 pay TV subscribers in 2015, according to Leichtman:

And Leichtman's analysis, as a firm that has traditionally downplayed cord cutting, appears to be conservative. Full year analysis by SNL Kagan indicates the pay TV sector as a whole lost 1.1 million subscribers last year, four times the drop seen the year before:

"SNL Kagan estimates the combined cable, DBS and telecommunications (telco) sectors lost more than 1 million video customers in 2015. The 12-month decline was more than 4x the 2014 decline, and marked the third consecutive overall annual drop for the industry. That said, the waning months of 2015 carried signs of stabilization after steep losses for the better part of the year. The industry dipped by only 15,000 total customers in the period ended Dec. 31, 2015, essentially matching the losses of fourth quarter 2014."

So why did cable have a better-than-usual fourth quarter? Charter, Time Warner Cable and Comcast have all been deploying faster speeds and new cable set top boxes, which appear to be luring back some customers that had previously fled to satellite and telcoTV alternatives. So what we're seeing is a lateral move of some customers between different types of legacy TV (deck chairs, Titanic, etc.), while cord cutting continues unabated in the background. Cable companies have also ramped up promotions in which they offer pay TV and broadband for significantly less than a customer can buy broadband alone -- meaning many of these tallied customers may not even have wanted (or even use) television service.

And it's worth noting these numbers may be even worse than they appear. For one thing, companies like Dish and Comcast have started including streaming video customer numbers in their legacy TV numbers to try and sooth investor worries that the legacy cable cash cow has caught a nasty case of pneumonia. You'll also note that as the housing recovery accelerates, broadband subscribers aren't growing in parallel, meaning there are millions of new home owners and renters that aren't signing up for traditional television service.

So, no, despite some analysis you'll read, cord cutting isn't "on the ropes," "overhyped," or the rogue opinion of a few mean old bloggers and journalists. It's a continued, very real consumer response to an industry that simply refuses to seriously compete on price.

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Filed Under: cord cutting, denial, tv
Companies: comcast, time warner cable

24 Comments

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Haywood (profile), 15 Mar 2016 @ 7:04am

It's not just price
I'm old enough to remember the birth of pay TV. The sales pitch was that it would be commercial free. There was still some doubt that it would be widely adopted. Though in fringe areas, it was a boon, as previously those folks could do little with an antenna. Introducing it to the cities, where free TV could be had with rabbit ears, took a bit more persuasion, and to begin with it was a low enough price and a good enough product to entice the public. Fast forward to today; we have the internet, cable TV has degenerated to reruns, commercials, 200+ channels with nothing on, and a few really good shows. Is it any wonder the customers are running for the exit.
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Anonymous Coward, 15 Mar 2016 @ 7:06am

Comcast's argument gets better every day
We're now up to $90/month for "extended basic" TV service. No Internet. No voice. Just the basic channel lineup, no movie channels, no extra sports channels. (And lots of garbage channels that we never watch, like shopping networks and MTV and other worthless junk.) Comcast is doing its best to convince us that we that we could put that $1100/year to much better use.
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Ghazban, 15 Mar 2016 @ 7:12am

Cable companies have also ramped up promotions in which they offer pay TV and broadband for significantly less than a customer can buy broadband alone -- meaning many of these tallied customers may not even have wanted (or even use) television service.

This is us. When we moved last May it was cheaper to get a tv/broadband bundle thru Comcast instead of just broadband alone. I may have turned on the cable box about 3 times total since then.
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blogagog (profile), 15 Mar 2016 @ 7:12am

This is a good report, but are we sure we should be trusting this Kagan guy from Saturday Night Live?
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Ninja (profile), 15 Mar 2016 @ 7:15am

Re: It's not just price
The sales pitch was that it would be commercial free.

And it was. Now the sheer amount of commercials make it simply as obnoxious as open channels.
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Ninja (profile), 15 Mar 2016 @ 7:19am

They are not dead yet because licensing. That's it, copyright keeping cable alive artificially while it stops better services from developing as they should.

Broken copyrights.
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FITZ! (profile), 15 Mar 2016 @ 7:36am

Underemployment
Just like unemployment numbers, the total subscriber numbers can be a bit misleading. Several years ago, I cut the cord... sortof. In my research I found that continuing to pay for the cheapest level of TV service made my internet more than that much cheaper. They're basically paying me to allow them to tally me as a "Pay-TV Subscriber". I'm happy with this arrangement.
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Anonymous Coward, 15 Mar 2016 @ 7:37am

Re: Comcast's argument gets better every day
Time Warner's, too.

I went over the weekend to the TWC store to return a digital adapter that I didn't need but hadn't gotten around to taking back (and the charge for which just showed up on my bill). While the CSR lady was nice and all, she kept trying to tell me that I had to have this to watch tv (tho I kept repeating that I had all the equipment I needed) and also kept trying to up-sell me to a bundle (which I refuse to get). All I wanted was to get $3.59 off my bill. I came away with close to $15 off my bill (that I didn't ask for), which should last for a year (unless they add some more below-the-line fees). I've had rate-creep for the past 5 months, and this brings my bill back down to where it was that 5 months ago.
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Violynne (profile), 15 Mar 2016 @ 7:43am

So why did cable have a better-than-usual fourth quarter? Charter, Time Warner Cable and Comcast have all been deploying faster speeds and new cable set top boxes, which appear to be luring back some customers that had previously fled to satellite and telcoTV alternatives.
I'm not buying this for one second.

The only reason growth restored is the oligopoly rule which states "If you want our top of the line service, you'll have to get a bundle. It's not available as a stand alone product."

AT&T has a 72Mbps connection in its U-Verse lineup. However, if you want only this, you can't get it. It's only available to (qualified customers) and with AT&Ts bundle of cable (phone optional, not required).

The biggest insult comes in the form of the generous 20% discount you can receive off your monthly cable bill if you also switch to AT&T's wireless plan.

In short: give them all your money, and watch as the company throttles the crap out of your high speed "choice".
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Rich, 15 Mar 2016 @ 7:46am

Re: Re: It's not just price
Plus, they are now showing commercials over top of the show. And they are getting bigger and bigger. I thought the "bugs" were annoying when they started.
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Mason Wheeler (profile), 15 Mar 2016 @ 7:58am

The revolution will be televised, but no one will be watching.
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Anonymous Coward, 15 Mar 2016 @ 8:56am

Re:
No the revolution will be televised AND everyone will be watching. However, it's just that they will all be watching commercials and not the revolution.
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Anonymous Coward, 15 Mar 2016 @ 9:12am

Re: Re:
No the revolution will be televised AND everyone will be watching.

It's just they should be watching live streams over the Internet from phones on phones, so that they stay ahead of the TV, except the data caps will stop them
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Anonymous Coward, 15 Mar 2016 @ 10:39am

Re: Re: Re: It's not just price
Plus, they are now showing commercials over top of the show.

This is why I gave up on AMC. They shit advertisements all over the movies that they claim to treasure as cinematic works of art, and it makes them unwatchable. (And having the channel logo on constant display is another annoyance: I frickin' KNOW what channel I'm watching, thank you very much.)

And they wonder why we pirate.

Once we figure out how to get HGTV and live sports, we're gone.
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Joetd, 15 Mar 2016 @ 10:44am

New assisted living cable subscribers
Time Warner Cable installed cable service in at least one assisted living facility. This was a default program to place new cable boxes in residents's rooms that previously had no cable service. That accounts for some of their increases. Have they done the same in some college dormitory rooms? I dunno.
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JBDragon, 15 Mar 2016 @ 12:38pm

I cut the cord almost 4 years ago and haven't looked back. That's after being with Comcast for around 18 years!!!

4 years ago I was paying around $170 a month. That was Mid speed Internet back then which is a lot slower then I have now and not quite basic cable and a Dual tuner DVR. To get that 1 or 2 channels I wanted, You had to pay for the more expensive bundle. That's how they set it up. I hated that bill every month. It was just me and I couldn't watch enough TV or use the Internet enough to justify that price.

Not long before I started going house hunting I cut the TV service and handed them the Cable TV Box. Then just had Internet only, which they give me a 6 month discount on that I wasn't expecting to get, but it was long enough in the end to get my house and move in.

When I got my house, I signed up with U-Verse and got their 18Mbps service for $35 a month. It was really around 12Mbps and Upload speed was only around 1.3Mbps. But for my needs fast enough. I also mounted a large Antenna, and wired my house for Gigabit Ethernet using CAT6 wire.

All was good, after the first year and they jacked my rates up, I got them to drop it back down for another year, but after that year, they jacked it up again for about $55 a month for those speeds!!! I threaten to leave them and go to Comcast as I'd get faster speeds for a lower price. I could get 50Mbps service for $45 a month. Upload speed would be faster also. So I ran a new COAX wire to where I wanted my new Cable modem to be at. Hooked it up, called Comcast, for $5 more a month, $50 a month I could get 105Mbps service. Doing my testing I'm getting around 120Mbps service and around 11Mbps upload speed. So much faster and cheaper.

I'm still only Internet at $50 a month. Still that's a bundle of money I've saving every year. Netflix I already had back then, so I don't consider it a extra cost now. I'm sure in 4 years time, that $170 would be in the $200+ range by now. I know someone at working paying those kind of prices now and wants me to help them cut the cord. One of my brothers just did it a year ago after finally getting his wife on board.

You don't realize how much money you're paying out. But do some simple math!!! Say my $170 didn't go up, and cutting the cord was $50 this whole time. That's $120 a month I'm saving. In a year that's $1,440. In 10 years, that's $14,400. In 20 years $28,800!!! I know many people that have had cable TV for that long. Prices will of course continue to go up. But this is savings!!! This is money staying in my pocket. It's these little things, $10 here, $20 there that really add up over time.

That's just a crazy amount of money for TV!!! Something I get for FREE with a Antenna. With my Tivo Roamio that I got for $299 with Lifetime service with 4 built in tuners, and now the latest feature Commercial Skip!!! My Tivo Mini's so I can start watching in one room and continue in another. ZERO monthly costs and 100% legal. When I'm on my Roof and I don't see any other Antenna's in the Neighborhood, I laugh and think SUCKERS!!!!
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ThatDevilTech (profile), 15 Mar 2016 @ 1:57pm

Re: New assisted living cable subscribers
There are apartment complexes around here that advertise Internet AND cable as part of the rent charges now. It's not an add-on, but an automatic charge. How many "new" customers will come to the provider that way? The numbers are completely skewed with no true way of seeing it without going door-to-door and asking the people themselves. There really should be a "tech" census to try to get a true picture of what's happening. But, then the cableco/ISP's would be up in arms over that probably as it would really shed light on their bs.
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Anonymous Coward, 15 Mar 2016 @ 2:16pm

Re: Re: New assisted living cable subscribers
So they have not only found a way to increase their subscribers, but also to get somebody else blamed for increasing subscription charges, by hiding them in the rent.
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Anonymous Coward, 15 Mar 2016 @ 2:21pm

I will never pay for cable tv again. If it wasn't for the internet monopolies Comcast wouldn't be getting any money from me.
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Anonymous Coward, 15 Mar 2016 @ 7:34pm

Re:
So what you're saying is they've figured out how to rig their bundles so that they can make cord cutting statics look insignificant. Can't say I'm surprised for even a second.
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Stephen Russell, 16 Mar 2016 @ 1:33pm

Need a few more channels over to streaming to make the switch.
Wife wants her same content no matter how it is received. I will get HBO Now and a few others to balance what is on NetFlix and Amazon.

Sports is still lacking!
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Yeah...No!, 17 Mar 2016 @ 3:30pm

Cord cutting
I receive special offers from My ISP on a weekly basis to convert me to a promotional bundled service. no chance in hell. Sure I pay 59.99 for crap internet when I could get Internet/TV/Phone for 75.00 but why pay the extra 15 for antiquated useless services? I cant wait for the dying giants to finally give up the ghost. Google fiber will be our savior.
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Peter, 17 Mar 2016 @ 6:51pm

Re: It's not just price
I'm one of those former customers who ran for the exit. Cable has become so obnoxious with its ad stuffing that I wouldn't accept it for free. My streaming bill is a $90 savings over what I used to pay, and my viewing options are better than they've ever been.
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qka, 27 Mar 2016 @ 5:10pm

Re: Need a few more channels over to streaming to make the switch.
Know what you mean. The wife is addicted to Turner Classic Movies (TCM). While they have a sweet looking app for watching stuff, you have to have a cooperating cable company for Internet.

The really fucked up part is TCM is owned by Time Warner media, which does not have such a agreement with Time Warner Cable!!!
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