Remember Claims That Cord Cutting Was On The Ropes? It's Actually Worse Than Ever

from the numbers-don't-lie dept

Thu, Aug 18th 2016 8:36am — Karl Bode

Despite the obvious realities that ratings are down and consumers are cutting the cord, there's a vibrant and loyal segment of executives and analysts who still somehow believe cord cutting is a myth. Every few months, you'll see a report about how cord cutting is either nonexistent or overstated. Earlier this year, these voices were quick to argue that the industry had cord cutting on the ropes because several of the biggest cable providers saw modest subscriber gains in the fourth quarter (ignoring several that saw net subscriber losses for the year).

Those folks have been pretty damn quiet the last few weeks as second quarter earnings show cord cutting is worse than ever.

A new report by Leichtman Research notes that the pay TV industry collectively lost about 665,000 net video subscribers last quarter, a number some other analysts say was closer to 757,000. Dish Network alone lost 281,000 subscribers, while the new, larger Charter (after acquiring Time Warner Cable and Bright House Networks) lost 143,000 subscribers. "Phone" companies were hit particularly hard, telcos alone losing 500,000 subscribers in just one quarter. In fact, with AT&T and DirecTV now being one company, every single pay TV provider saw a net loss in TV subscribers during Q2:

It's kind of hard to spin this kind of bloodshed, so cord cutting denialists are likely to remain quiet -- at least for a few months.

Most analysts believe that these losses are due in large part to folks that are moving to a new home or apartment, and not bothering to sign back up for cable when they do. But if you factor in that these numbers aren't scaling alongside housing growth, things are even uglier than the numbers indicate. But because companies like Comcast occasionally see quarters with very modest subscriber gains (thanks in part to their monopoly over broadband and bundling), you'll still somehow see folks trying to argue that cord cutting is either non-existent or an over-hyped fad.

But occasionally somebody will step back and take an intelligent big picture look at the numbers, making the overall trend pretty damn apparent:

None of this is to say that cable providers couldn't quickly change the entire narrative by simply competing more seriously on TV service price (at the cost of higher broadband bills, of course). But instead, most cable sector executives still desperately cling to the narrative that cord cutting is a fad that stops once Millennials procreate. This is, they clearly believe, just a touch of cash cow indigestion that will magically resolve itself, so there's no reason to stop hitting consumers with biannual rate hikes for bloated bundles of unwatched channels.

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Filed Under: cord cutting, internet, tv

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Anonymous Coward, 18 Aug 2016 @ 8:43am

Worse than ever?
"Remember Claims That Cord Cutting Was On The Ropes? It's Actually Worse Than Ever"

Let me fix that, this won't hurt a bit..

"Remember Claims That Cord Cutting Was On The Ropes? It's Actually Better Than Ever"
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DannyB (profile), 18 Aug 2016 @ 8:44am

It's not as bad as it looks
If you just flip that chart vertically, and flip all the +/- signs, everything looks fantastic for the cable industry!

And it's a simple and easy to accomplish step that any manager could do. Even an MBA.
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Vidiot (profile), 18 Aug 2016 @ 8:48am

Drop the label
Like the proverbial frog in the pot of water, cable won't acknowledge there's a problem until about 90 seconds before it's fully poached; with a high-stakes, cash-cow business model, they're fully committed to believing their own line of shit, no matter what.

But one good indicator of a sea change... recognizing reality... is when everyone stops putting scare quotes around "OTT" -- or, better yet, drops the term altogether. It's no longer "over the top"... our current day blend of streaming, mobile and a whiff of broadcast is the new normal, and it doesn't need a label, because we're all living it.
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Roger Strong (profile), 18 Aug 2016 @ 8:54am

> But instead, most cable sector executives still desperately cling to the narrative that cord cutting is a fad that stops once Millennials procreate.

Fair enough; I'm counting on CompuServe to make a comeback once baby boomers retire.
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streetlight (profile), 18 Aug 2016 @ 8:56am

What about increases in sub to lower priced TV tiers?
I'm not sure if this is still the situation but it has been the case that the cost of a cable Internet plus low end TV package can be less than the cost of Internet alone. If folks are opting for that pay TV/Internet subscription instead of completely dropping TV while maintaining Internet, the situation for Pay TV may be worse than these numbers show.
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Paul, 18 Aug 2016 @ 9:05am

I like this newsworthy article:
https://news.slashdot.org/story/16/08/18/1521203/t-mobile-brings-back-unlimited-data-for-all
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yankinwaoz (profile), 18 Aug 2016 @ 9:06am

..."most cable sector executives still desperately cling to the narrative that cord cutting is a fad that stops once Millennials procreate."

Yea. They don't realize that most Millienials can't afford to procreate. You know, with those crazy tuition loans, sky high rents, low salaries, rising health insurance co-pays and premiums, and other more important bills than cable TV.
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yankinwaoz (profile), 18 Aug 2016 @ 9:10am

Re:
I also wanted to add. The cable TV companies will learn the hard way that when these Millienials do have kids, those kids aren't going to watch cable TV. They are going to be using digital data apps using entertainment that the cable TV companies have no ownership of.
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Anonymous Coward, 18 Aug 2016 @ 9:13am

They're still not acknowledging the existence of cord-cutting. When the column heading is "Net Adds" (even after 6 quarters of loss) it shows exactly what their mindset is.
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Anonymous Coward, 18 Aug 2016 @ 9:14am

DirecTV's growth is due to AT&T Pushing their customers to it from U-Verse. That's why it was the only positive number there.
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Anonymous Coward, 18 Aug 2016 @ 9:19am

Part of the problem(in the big picture) is people thinking 3 years is looking at the big picture. Everyone is a wall street broker now, there are no long term investors.
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Capt ICE Enforcer (profile), 18 Aug 2016 @ 9:29am

Most see profit lost, I see profit gained.
Most on the outside would view this as terrible, but from an inside corporate view this slide is great for the company. And this is why Comcast and AT&T are not concerned...

TV provider weekly meeting...

Intern: Sir, we are losing customers at an increased rate. Just look at this slide, we are DOOMED....

CEO: WTF are you talking about. This slide is great.

First it shows that soon we won't have to negotiate license with companies in order to provide their junk shows.

Second, this gets rid of the business model of providing customers with unlimited viewing option for one set price.

Third, it allows us to increase our profit margins. As the cost for hardware decreases month to month, we are able to charge a premium which will increase with the more they want to watch. We will charge $0.20 for each Youtube video, $1.20 for each Netflix video, and just wait until the 4k videos come out. That will be $6.15 for each video based upon the data consumption....

Boys, we are RICH, Rich, Rich....
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Anonymous Coward, 18 Aug 2016 @ 9:42am

Re:
Didn't CompuServe get bought by AT&T and become the basis for their broadband service?

A better bet would be AOL.
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Anonymous Coward, 18 Aug 2016 @ 9:46am

Re: I like this newsworthy article:
T-mobile keeps sending me text messages that I've used up 800 MB of my data sometimes followed by text messages that I've used up all my 1 GB of network data when I don't even use hardly any of it. About the only thing I do is occasionally use my GPS on my 4G and maybe look something up real quick on the web browser. App updates are done over Wifi. When I check how much network data I used in a month on my phone it shows maybe 200 MB according to my phone. I haven't bothered calling them about it, I figure it's not worth the hassle, but what the heck?
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Anonymous Coward, 18 Aug 2016 @ 9:47am

Re: What about increases in sub to lower priced TV tiers?
Yes; the reason for bundling Pay TV at a loss with cable internet is done for precisely this reason. It helps the cable companies prop up their subscriber levels so that they can keep their advertisers.

And then the Nielsen measurements only generate averages for actual broadcast TV users (although they also do some streaming now for those same broadcast users), and extrapolate the results across the entire subscriber base, including the people who only have cable TV because it came with their broadband subscription, but have never actually physically connected a device to the system.
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Anonymous Coward, 18 Aug 2016 @ 9:48am

Re: Re: I like this newsworthy article:
Maybe they've got other devices in the same data pool? In other words, you're getting someone else's texts.
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Anonymous Coward, 18 Aug 2016 @ 9:54am

Re: Re:
" those kids aren't going to watch cable TV. They are going to be using digital data apps "

Not to mention the explosion in electronics kits and robot kits for kids from about 6-8+, including learning to code for themselves. Plenty of stuff to do instead of lying in front of a TV.
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DV Henkel-Wallace (profile), 18 Aug 2016 @ 10:09am

Even more than the numbers show
(Clearly "worse" is the wrong word for everyone but the cable industry). My only choice is COMCAST. It's cheaper to buy internet + TV, so that's what I got. Slightly cheaper still if I chose cablecard which of course I did. So have a cablecard taped to the modem (mine, not theirs) for when I cancel internet service.

I'm in their stats as a cable subsriber but there are no cable advertisers getting any "benefit" from my subscription. This is simply COMCAST cooking the books.

The numbers are even worse: my vacation house was selected by Nielsen to be monitored for TV viewership. Every couple of months the local rep tries to get me to sign up, but then when they realize I haven't bought a TV "yet" they go away and my house is not in the numbers. That's right: if I purchased a TV, even if I never used it, I'd be counted. So national subscriber percentages are artifically inflated too.
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Roger Strong (profile), 18 Aug 2016 @ 10:48am

Re: Re:
It was bought by WorldCom. The next day WorldCom traded CompuServe Information Service (the content and servers division) to AOL, keeping CompuServe Network Services (the networking division) for itself. In return it got AOL's networking division. WorldCom would handle the networking for both companies, while AOL would handle the content and online services.

WorldCom promptly spiraled to bankruptcy, while AOL's bit of CompuServe withered away. It still technically exists as a dial-up ISP and web page stuck in 2001.
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SpaceLifeForm, 18 Aug 2016 @ 11:13am

Re: Net Adds
Well, if it said 'Net Subs'
instead 'Net Adds', it might
inform them where those subs
are moving to. The net.
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Anonymous Coward, 18 Aug 2016 @ 11:24am

Re: Re: Re:
With emerging 100 TB 3.5 inch very low power hard drives, sites like Netflix coming up with their own original content, and new competing content creators popping up everywhere willing to license their content under less restrictive terms for cheaper, it's possible we might start seeing the return of more brick and mortar like services like blockbuster, redbox, traditional mail, or services that offer their own delivery or use other independent delivery services (based on phone apps and whatnot) to deliver content.

For instance I see a T.V. series on Netflix. I watch an episode or two online. I like it, so I order the rest of the season (or all the seasons) to be delivered. I can also include a few other shows and movies as well. While they are being delivered I can continue to watch more episodes online.

What I already have is a wireless more permanent device with a built in large hard drive that can wirelessly sync to my tablet or television via a Netflix app or it can be connected to my router or television via an Ethernet cable.

A hard drive arrives and I use a USB cable to connect it to my existing permanent device above. Everything I ordered is automatically transferred onto my permanent hard drive. I send the mail in hard drive that was sent to me back. I can then order more stuff to be delivered or delete stuff off my permanent drive as I decide I've either watched them or don't want to see them.

This can augment my Internet connection and largely reduce my dependency on ISP bandwidth while still making my experience seamless.
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Skeeter, 18 Aug 2016 @ 11:34am

Why Cord Cutting Shouldn't Surprise You
Why does the nation 'cutting its cord' surprise you? When's the last time you actually watched a decent show on the 'Big 3 Free Networks'? When's the last time you actually had any good shows on Cable that you couldn't get 'at your convenience' on a pay-per site online? I mean, there's a few my family watches that are from DECADES ago, but in general, there's nothing but trash political and sociological spin on TV anymore, the FCC is complicit and won't step in to enforce any existing (or propose new) rules related to 'fair time' or 'balanced programming'.

While 'cable' is exemplary of 'Free Market' and 'Capitalism', they are missing the big point, you can't sell water to a fish, and you can't sell meat to a vegetarian. They are in a death spiral because they can't or won't tell their 'manufacturer' (i.e.: Hollywood) that the trash is killing them, and they won't carry it anymore.

Yes, Hollywood and liberals can sell all the MSNBC, 'Pitch', 'Notorious' and assorted 'real dramas' all you want, but if the silent majority isn't buying it, and the target liberal audience isn't tuning in, then what you have is wasted radio waves (and cable bandwidth) choked with stumbling white elephants that will not only be one-season-wonders, but the 'magic bullet' that eventually FORCES cable to restructure.
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tom (profile), 18 Aug 2016 @ 12:41pm

Econ 101, higher prices = lower demand. For years the cable companies made the argument, often true, that the higher prices also brought more channels. And for a while, folks bought in. But with most folks watching around 20 channels, the more = better = justifies higher prices isn't working anymore. Plus they keep fracturing existing channels into two or more and make sure one of the parts winds up only in the top premium tier.
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Anonymous Coward, 18 Aug 2016 @ 1:00pm

Re: Re:
Wait!

[Pulls CD out of the drawer]

I have 500 Free Hours left!

(Dang, can't find a CD drive on this computer.)
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Anonymous Coward, 18 Aug 2016 @ 1:07pm

Re: Re: Re:
Go Pokemon Go!
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PRMan (profile), 18 Aug 2016 @ 4:23pm

Re: Why Cord Cutting Shouldn't Surprise You
Since you sound like a Republican, might I recommend Blue Bloods and Hawaii Five 0, which both lean that direction much of the time.
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David (profile), 18 Aug 2016 @ 4:34pm

But millennials aren't having sex.
So, the whole theory is going to fall apart.

Maybe, the millennials are have sex but are lying in surveys. That would be just like them.
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Anonymous Coward, 18 Aug 2016 @ 5:44pm

Man I was trying out the YouTube on my xbox recently. The content you can get there had me absolutely considering cutting the cord. It totally makes sense
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Anon, 18 Aug 2016 @ 7:59pm

Cord Cut Prospects
OK, I'm one of those 60-yo boomer fogeys who still pays a horrendous amount for cable... but this is my viewing habits; almost everything I watch is DVR'ed. I only watch live TV for the news and some sports. I binge a lot of stuff, either Netflix or downloaded.

So do I *need* cable? Not really. It's just convenient for DVR functions. more Netflix options (Canadian Netflix sucks) and other downloads, live streaming for CNN and CBC news, political debates, etc mean that really, it might not be impossible to cut the cord. A bit more convenience

Funny thing, this describes my 70-plus in-laws' viewing habits too - except for the illegal downloads. Live cable is only there until the alternatives are even more convenient.
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Anonymous Coward, 18 Aug 2016 @ 8:13pm

Re: Why Cord Cutting Shouldn't Surprise You
"Silent majority" you've picked the dog whistle word of the day! I'll hand you over to Chuck to tell you what you've won!
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jackanapes99, 18 Aug 2016 @ 11:06pm

Maybe the cable companies should hire Baghdad Bob to be their spokesman. Instead of pounding the Americans, he can come out and say the cable companies are pounding cord cutters. At least then it'd be entertaining lies.
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Kevin Carson, 19 Aug 2016 @ 12:20am

It's actually BETTER than ever
...there, fixed that for you
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John Fenderson (profile), 19 Aug 2016 @ 8:12am

Re: Cord Cut Prospects
"So do I *need* cable? Not really. It's just convenient for DVR functions."

Why not just buy a DVR?
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Ninja (profile), 19 Aug 2016 @ 8:46am

It's pretty easy to set up home media centers nowadays so a simple solution for that would be to move towards full online programming offering channels via streaming. This would free whole portions of the cables to be used for internet (which would promptly allow the telcos to bump their speeds to 'developed-world-levels' overnight without any investment in infra-structure. Of course they'd need to stop with the bundling bullshit so some channels (and their owner) might be in a little trouble...
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Anonymous Coward, 21 Aug 2016 @ 12:40pm

Re: But millennials aren't having sex.
Nah, they totally are. They just aren't having it in the way the cable company needs to look important.
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JBDragon (profile), 22 Aug 2016 @ 8:46am

I cut the cord around 4 years ago and haven't looked back. I get enough sports on the broadcast channels. I mounted up a nice large directional antenna. I have a Tivo Roamio so I can DVR all that content and Tivo Mini's in the other rooms so I can watch any of that recorded content in my other rooms also. 1 button Commercial Skip is great. Between the antenna with my Tivo setup which costs me ZERO per month, I have Netflix which fills in enough holes. I have to much content to watch.

Once you cut the cord, you don't want to sign up to a bunch of other services and end up paying just as much money as before, for less channels. Maybe you're just watching to much TV!!!

I had to call Comcast when my prices went up to normal rates to get another price drop and it was cheaper to get a bundle with HBO then just Internet ONLY. I don't even have time to watch much HBO, and the cheap cable box they gave me I haven't hooked up as I'd need to run a cable and really don't care. I just wanted Internet ONLY, and went bundle for the cheapest deal. I'm still using the Antenna and Tivo anyway.
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Phil, 14 Sep 2016 @ 7:48pm

Cutting the cord again
Cut cord (except internet) back in 05, when you could get basic internet 50/5 for 50. Rejoined cable a few years ago (well, 3 i guess, that was the contract). Jumped from 155 to 205 after contract.

Just tested an amazon basics HD antenna in the Pittsburgh (murrysville/plum region) + basic tuner for $60 and I get all 4 OTA (plus 20 shopping channels/archie bunker). That'll be enough sports for me... If its only on NBCSN, I'll hit the bar and support my local business.

I'll miss CNN... the one time a month there's a live-newsworthy event.

Sorry to necro this thread, I've been staring at this thread for an hour as I make the decision to cut again... from 210 a month to 80. (Fuck you comcast, 50 bucks to 80 for mid-teir internet per month in the 5 years I've measured. 72 for 75/5 i believe, plus the inevitable "recovery fees".
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