Cord Cutting Is Very Real, And 25% Of Americans Won't Subscribe To Traditional Cable By Next Year
from the head-buried-firmly-in-the-sand dept
For years the traditional cable and broadcast industry has gone to great lengths to deny that cord cutting (getting rid of traditional cable TV) is real. First, we were told repeatedly that the phenomenon wasn't happening at all. Next, the industry acknowledged that sure -- a handful of people were ditching cable, but it didn't matter because the people doing so were losers living in their mom's basement. Then, we were told that cord cutting was real, but was only a minor phenomenon that would go away once Millennials started procreating.
Of course none of these talking points were true, but they helped cement a common belief among older cable and broadcast executives that the transformative shift to streaming video could be easily solved by doubling down on bad ideas. More price increases, more advertisements stuffed into each minute, more hubris, and more denial. Blindness to justify the milking of a dying cash cow instead of adapting.
But given the numbers we've seen over the last year or two, even the cable and broadcast industry has had to scale back its "head firmly in the sand" approach to market evolution. Last month MoffettNathanson analyst Craig Moffett, the telecom industry's top media quote machine, pointed out that 2016's 1.7% decline in traditional cable TV viewers was the biggest cord cutting acceleration on record. Kagan agreed, a recent report indicating that Pay TV providers lost around 1.9 million subscribers last year, the firm predicting a notable spike in the number of broadband-only homes:
"At the same time, American broadband-only homes grew much faster in 2016 — increasing by more than 2 million. Kagan estimated the U.S. had 15.4 million non-multichannel broadband homes at the end of last year, up from 13.3 million end of 2015. That suggest that 13% of the country’s occupied households make the decision not to take a traditional multichannel TV package."
Another new report by Convergence Research predicts that this broadband-only trend will only continue:
"US TV subscriber losses and cord cutter/never household additions saw a major increase in 2016 as compared to 2015: We estimate 2016 saw a decline of 2.05 million US TV subscribers, 2015 saw a decline of 1.16 million, and forecast a decline of 2.11 million TV subscribers for 2017...As of YE2016 we estimate 27.2 million US households (22.3% of HHs) did not have a traditional TV subscription with a Cable, Satellite, or Telco TV access provider, up from 24.2 million (20% of HHs) YE2015, and we forecast 30.3 million (24.6% of HHs) YE2017. 2015 saw 2.1 million, 2016 3 million, and we forecast 3.1 million 2017 cord cutter/never household additions.
The shorter version: by next year, one quarter of Americans will no longer subscribe to traditional cable. And that's only going to accelerate as cheaper, better, streaming alternatives emerge.
In a functioning, healthy market, these companies would see the writing on the wall and adapt, benefiting users. And to be fair, some have tried (Dish's Sling TV, AT&T's DirecTV Now). But with the cable industry's growing monopoly over broadband, a return to rubber-stamp regulation, and the looming death of net neutrality, many of these companies correctly understand they won't have to seriously compete anytime soon. They can simply impose unnecessary usage caps and overage fees on uncompetitive broadband markets, then use zero rating to give their own services a leg up -- while penalizing competitors.
Unfortunately for them, even that likely won't "solve" the tectonic evolution that's only just starting to take place. Ultimately, denial-prone cable and broadcast executives will be left with just one, unthinkable option: actually competing on cable TV price, flexibility and quality.
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Filed Under: cable, cord cutting, internet, trends, tv
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Good one! Do you know that joke about the drunk guy and the dog?
No seriously, why compete when we can buy laws?
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This will get really ugly before it finally resolves. Hopefully, we lose 500 channels of reality TV in the process...
Personally, I watch far more independent and BBC productions than American ones...on Amazon Prime Streaming...
/ proud cord-cutter and dish-dropper /
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Hurdle or Limbo?
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"The beatings will continue until morale improves."
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25% are just losers
Can't the cable companies just make up for lost customers by raising the price? That is a sustainable plan that would work forever -- like printing money!
Even if some people are no longer cable customers, companies like Comcast can still be the most hated by the remaining 75% of people who still have cable.
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Re: 25% are just losers
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Re: Re: 25% are just losers
Humans have a number of vestigial organs and behaviors that have most of their original function, left over from earlier stages of evolution. In the future this will probably include a hatred of Comcast.
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Re: 25% are just losers
She would rather pay MORE to support what we like directly.
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A solution to fix this
Oh, oh, I know!
Obviously the cord cutting, if it is happening at all, must be due to "job killing, business destroying regulations".
So let's eliminate all possible regulations on cable companies so that cord cutting will stop.
Coming Soon to an executive order near you!
(very few animals were harmed in the making of this post) (any resemblance to actual facts is unintentional and purely coincidental)
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Re: A solution to fix this
Coming Soon to an executive order near you!"
Does this eliminating all regulations include removing the regulation giving them a monopoly? Because if it does, It's not a bad idea. If they didn't have a monopoly would all this regulation even be necessary? Maybe? I would love to find out!
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Isn't that how the completing ISP's do it now?
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Also, building another separate infrastructure is only likely to increase the digital divide between urban and rural communities. There is a significant subsidy effect, whereby profits from urban areas enable connecting the rural areas.
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Just another type of CLEC...
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I'm trying to figure out what the point of this story is and the only thing I can come up with is Bode has a posting quota to meet.
Here are some more story ideas if you have trouble with your quota tomorrow:
* printer ink is expensive
* politicians don't always look out for their constituents
* current airport security practices don't make a lot of sense
You're welcome.
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For this story in particular, what does it add to the already voluminous (and often very good) back catalog of cord-cutting-is-real stories on TechDirt?
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Otherwise it's a waste of Anonymous Cowards time.
AC MUST READ ALL TD ARTICLES CONSTATLY.
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Say Bode were to fire up a robo-journalism script and feed it the catalog of cord cutter stories and have it generate a new story every twelve hours. If you think that would be a bad thing, then we agree in principle. If you don't see a problem with that, then we just have a different outlook on what publishing should be.
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Seriously, that question is precisely as relevant as yours.
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Anyone know if there's a way to edit Techdirt posts? I can't find the option.
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How many times a year should they post a story to let us know Robin Williams is still dead? That's what it feels like to me.
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You mean the same way out_of_the_blue, average_joe, darryl, Technopolitical, My_Name_Here care about the site?
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• AC continues to whine like a bitch
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held captive in an HOA
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I think the industry has pretty much hit bedrock at this point.
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Digging their hole the Vegas way,
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https://www.youtube.com/watch?v=qJh6EQ5gv7g
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Guys. I'm beginning to think there might be something to this cord cutting stuff after all!
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Kagan who?
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Re: Kagan who?
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Investors Beware
I recently moved, landing in one the Comcast-only zones. If I subscribe to TV and Internet, my monthly rate would be $10 less per month than for Internet alone. Let's be dead clear on this - Comcast would PAY me to pretend to use their cable TV services. I can only image that an ongoing intent to deceive investors is the goal of such subterfuge.
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only 25%? Seems low.
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Is it really a duck?
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used them all - now no more
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I would be nice if'
And what would it take to watch ALL the old tv series and movies in the PUBLIC DOMAIN???
Which can be interesting with a 1929 version od a Silent B&W of alice in wonderland and OTHERS, but the movie industry LOST TONS of movies to fire, and deterioration..BECAUSE THEY NEVER UPGRADED the filming materials AT LEAST 1 time every 10 years..
PS..YOU TUBE HAS A SELECTION..
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Haha, joke's on them. Millennials aren't only cord cutting, but also getting vasectomies and ligating their ovaries.
But maybe the cable industry is ready to wait for a good 20 years to enthrall those who want to have children after getting some stability.
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One question: what do we do when Comcast starts applying their usual Fee Creep jumps to internet service? Because once most of us are internet-only, that's obviously going to be next.
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Here is you downfall
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I want to cut the cord!
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Cord Cut and Replaced By More Cord
The discussion would have a bigger value if Americans were getting rid of cable and replacing it with books or more exercise (something most of them need). Instead, they are replacing traditional cable with what can nicely be referred to as non-traditional cable alternatives.
What does that mean? Instead of HBO, they are paying for Netflix. They are paying for memberships to streaming sites, are paying for streaming boxes and equipment, and so on. Then they are paying for more expensive higher speed internet options to do it all with. They are shunning radio stations and moving to paid streaming options for their smart phones.
In some cases, Americans are spending more on OTA antennas and such to maintain local programming.
Most importantly, many of the so called cord cutters are doing to the same company (cable) to get the internet services they need to do the rest. The cord isn't cut, it's just carrying different stuff.
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