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

Wed, Apr 26th 2017 6:27am — Karl Bode

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.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

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–The Techdirt Team

Filed Under: cable, cord cutting, internet, trends, tv

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Ninja (profile), 26 Apr 2017 @ 5:52am

"Ultimately, denial-prone cable and broadcast executives will be left with just one, unthinkable option: actually competing on cable TV price, flexibility and quality."

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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Roger Strong (profile), 26 Apr 2017 @ 6:38am
More price increases, more advertisements stuffed into each minute, more hubris, and more denial.

"The beatings will continue until morale improves."
- Old joke, cable industry excepted.
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DannyB (profile), 26 Apr 2017 @ 6:40am

25% are just losers
Isn't it the opinion of cable executives that the people cutting the cord are just losers and don't want to pay? Or something like that?

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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ThatFatMan (profile), 26 Apr 2017 @ 6:42am

Re: 25% are just losers
You don't have to be a Comcast customer to hate them. Even when I lived in areas where Comcast thankfully wasn't, I was glad I didn't have to deal with them because I hate them.
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DannyB (profile), 26 Apr 2017 @ 6:44am

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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Roger Strong (profile), 26 Apr 2017 @ 6:53am

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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Anonymous Coward, 26 Apr 2017 @ 6:54am

So, the situation is still the same? Thanks for letting us know.

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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Roger Strong (profile), 26 Apr 2017 @ 6:56am

Re: Re: Re: 25% are just losers
er, "LOST most of their original function."
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Roger Strong (profile), 26 Apr 2017 @ 7:00am

Re:
Are you still upset over Bode calling you a "top lobbyist?"
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Anonymous Coward, 26 Apr 2017 @ 7:00am

I had a guy from my ISP call me and try to upsell me a cable package. He was asking questions like what kind of shows do you and your wife watch. Do we have any kids. I told him we don't watch TV. That is not how we consume our entertainment. He couldn't wrap his head around the fact that we don't watch TV/cable. AT ALL. We have a TV, but it's only used for background noise and such. I may stream a show from time to time, but we simply don't consume entertainment like that anymore. I can read my news online. I can use you tube to watch a bit of bed time media. I do a bit of pc gaming...that's all the time I have for media consumption. It's not that I don't WANT cable, it's that their is no need for it. I think more and more people are like that. Why pay for something you just don't use or need?
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Anonymous Coward, 26 Apr 2017 @ 7:04am

held captive in an HOA
Have no option to "cut the cord", so cable bill is rolled into the monthly HOA fees.
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Berenerd (profile), 26 Apr 2017 @ 7:06am

" head-buried-firmly-in-the-sand "

I think the industry has pretty much hit bedrock at this point.
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Anonymous Coward, 26 Apr 2017 @ 7:13am

The cable industry and their approach to cord cutting has always made me think of the scene in Eric the Viking when High Brazil was sinking.

https://www.youtube.com/watch?v=qJh6EQ5gv7g
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Anonymous Coward, 26 Apr 2017 @ 7:25am

Re:
They're trying to break into the Chinese market the hard way.
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Ninja (profile), 26 Apr 2017 @ 7:25am

Re:
And the technology TD uses that forces you to read the site and every single post keeps amazing me. Ar amusing. Never mind the semantics.
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Lady Gwyneth (profile), 26 Apr 2017 @ 7:32am

I grew up with cable and traditional tv, I always hated it,I'm 18, part of the cable nevers because I can pay for as many online services as I want and it will never be more expensive than cable. My mom's cable bill (satellite rather) is something like 200$ a month(being generous here), most online premium straming sites are 10$ a month, unless I can manage to watch 20 different services, I am guaranteed to always save money compared to her, and somehow I'm the stupid one.
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Anonymous Coward, 26 Apr 2017 @ 7:34am

Perfectly on cue, ESPN, aka "the people who don't watch us are poor anyways channel" just announced 100 layoffs, including 40 on-air personalities.

Guys. I'm beginning to think there might be something to this cord cutting stuff after all!
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Anonymous Coward, 26 Apr 2017 @ 7:43am

Re: Re: Re: 25% are just losers
The Comcastic nerve bundle.
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Anonymous Coward, 26 Apr 2017 @ 7:45am

Re:
You forgot

• AC continues to whine like a bitch
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Anonymous Coward, 26 Apr 2017 @ 7:54am

Re: Re:
When you care about something it's hard not to speak up when you think quality is dropping. This isn't Reddit. My expectations for thoughtful, substantive pieces is pretty high.

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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Kode (profile), 26 Apr 2017 @ 7:54am

Kagan who?
"Kagan agreed" who, or what, is Kagan? Perhaps I'm missing it, but it's referred to twice (once as part of a quote) but with zero mention as to wtf it is.
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TheResidentSkeptic (profile), 26 Apr 2017 @ 8:02am

Re:
That's the scary part. They will try to get the "internet+TV package" approved as the ONLY service they sell...then try to make it illegal to NOT subscribe.

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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Anonymous Coward, 26 Apr 2017 @ 8:03am

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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someguy, 26 Apr 2017 @ 8:08am

only 25%? Seems low.
I'm 46 years old, born and raised in the US, and I've never had cable. I think my parents do now though.
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Anonymous Coward, 26 Apr 2017 @ 8:11am

In the process of cord cutting now. Just returned 3 boxes to Verizon, and downgraded services. There are plenty of options to ADD to your package online, but none to remove features from it. Have to actually talk to someone, who's just amazed that anyone would want less than everything, and to not pay $200 a month for a package that originally started at "$79" a month (before box rental, modem rental, DVR fees, local sports fees, "because we're a monopoly" fees, regulatory fees, etc...). Going with YouTube TV for the moment, because they have just about everything I watch, except for the Food Network (and that's usually nothing but repeats of shows anyway, which I can get online if I feel the need). $35 a month, unlimited DVR, and once you get used to using an app on your phone for a remote, it's amazing how many more features it actually offers. Hoping at some point in the near future they come out with a Roku app, but it's so much better than what I had from Verizon.
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Anonymous Coward, 26 Apr 2017 @ 8:19am

Re: A solution to fix this
"So let's eliminate all possible regulations on cable companies so that cord cutting will stop.
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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Anonymous Coward, 26 Apr 2017 @ 8:28am

Re: Re: Re:
Yeah TechDirt should only write stories when Anonymous Coward thinks it's relevant.

Otherwise it's a waste of Anonymous Cowards time.
AC MUST READ ALL TD ARTICLES CONSTATLY.
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Texas Tupac, 26 Apr 2017 @ 8:37am

Re: Re: 25% are just losers
I don't hate Comcast. I had DirectTV and ATT Uverse previously, and the Xfinity services and features are significantly better. Maybe it's just low expectations but I really hated Direct and Uverse but I don't feel the same about Comcast.
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Anonymous Coward, 26 Apr 2017 @ 8:45am

Re: Re: Re: Re:
Assuming you give a shit about TechDirt, surely there's a point where you would speak up as well?

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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Anonymous Coward, 26 Apr 2017 @ 8:58am

Re: Re: A solution to fix this
Remind me again about how the final mile is to be dealt with. Oh that right, make it publicly owned; which keeps it government regulated, plus in practice would tie up the courts in legal fights to achieve.
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Ninja (profile), 26 Apr 2017 @ 9:15am

Re: Re: Re:
It's a follow up with new numbers as the trend evolves? When I see a new article about a topic I don't want to hear more or don't care enough to go past the headline I simply don't read. Do the same.
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Anonymous Coward, 26 Apr 2017 @ 9:34am

Re: Re: Re:
What is the exact number of days Techdirt should wait before posting an update? What is the number of new reports or new data that should be released before Techdirt posts about it? Where can Techdirt contact you to get your permission to publish new posts?
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Anonymous Coward, 26 Apr 2017 @ 9:38am

Re:
Making breaking DRM illegal (very important for content lockdown), massive use of zero-rating to better shape a garden (the AOL-dream reborn as with Facebook Free basics), different prices and windows for internet competitors (The "see, it is more expensive to watch tv on the internet"-propogation) and several other innovative trickery to reduce choices is just part of how these companies will operate in the next ungefaehr 10 years untill a compromise ensures them a better future than if they had to compete on an open market.
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Anonymous Coward, 26 Apr 2017 @ 9:46am

Re:
YouTube TV looks good. It is only available in certain cities at this time. My Comcast Noncompetitive Area Usage Cap could make it an issue if I have 6 accounts streaming at home (max 3 at at time per YTTV).

Is it really a duck?
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Vic B (profile), 26 Apr 2017 @ 9:55am

used them all - now no more
Comcast, U-Verse, Dish, Direct TV... I've had them all. I think they are all modeled after one another and thus offer the same low service. This weekend we finally put an end to our misery by canceling our service and switching to Sling for $20/month. All that because our $130/month package did not include ESPN... wtf?!? Good weekend after all: Warriors beat Portland and I'm saving $1320 over the next year.
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Anonymous Coward, 26 Apr 2017 @ 10:05am

Re: Re: Re: Re:
To answer your questions, my complaint was more about quality than quantity, although they are related. If CNN were to offer an over-the-top product today and TD wrote about it, I'd have no problem because that's a change. Then if another big hold out did the same thing tomorrow, that too would be worth writing about. But in three weeks when Bode writes another story about cord cutting being a real trend, that's not worth it. There's no value in that story for anybody.

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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DannyB (profile), 26 Apr 2017 @ 10:09am

Re: Re: Re: A solution to fix this
Let municipalities build their own infrastructure along side existing infrastructure. It would be the last of the last mile infrastructure that would ever be needed.
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Anonymous Coward, 26 Apr 2017 @ 10:22am

Re: Re: Re: Re: A solution to fix this
Does that include sharing the exchanges and routers that connect to the rest of the networks? Without those interconnects, a final mile infrastructure will just be dark fiber, because it goes nowhere useful.
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Anonymous Coward, 26 Apr 2017 @ 10:32am

Re: Re: Re: Re: Re: A solution to fix this
"Does that include sharing the exchanges and routers that connect to the rest of the networks? "

Isn't that how the completing ISP's do it now?
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Anonymous Coward, 26 Apr 2017 @ 10:53am

Re: Re: Re: 25% are just losers
You are one of the lucky few that haven't had a bad call on their support line. I have had a couple fairly terrible support calls, I have also had some good calls. What really bugs me is I have had a rep visit my house and out right lie to me. The second time a rep came by, couple years later, I told the rep that they are either lying or have been given misinformation. I asked for a business card and told her I will call back after the date for the "upgrade" because it won't happen. That her job was basically spreading mis information to all the houses in the area since a majority of them wouldn't know how to check if they have been given a speed upgrade. Make the customers think comcast is doing something and then pull the plug. Sure assured me that Comcast was going through with the upgrade. She was a bit uncomfortable when I called back later asking about the upgrade. She told me that Comcast cancelled the upgraded. "Of course they did."
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Charlie, 26 Apr 2017 @ 10:57am

I wonder what happens if Spacex's upcoming satellite constellation is actually the answer to the last mile problem (and Google fibers' reason to pivot to wireless). That really would throw the cat among the pigeons.
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Ninja (profile), 26 Apr 2017 @ 11:36am

Re: Re: Re: Re: Re:
Robin Williams being death is not going to change but if new data emerge showing that it was murder and not suicide that killed him then it makes sense to keep reporting on his death. Likewise, the cord-cutting phenomena is already documented and we know it is happening. But if new numbers emerge that show acceleration or a shift of behavior I am very interested. So as I said before, don't read. I respect your lack of interest but I disagree with your comment.
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Anonymous Coward, 26 Apr 2017 @ 11:54am

Re: Re: Re: Re: Re: Re: A solution to fix this
Actually, in countries with shared infrastructure, it is the final mile that is shared, as it is the most expensive to implement and maintain. The cost of digging in ductwork, or erecting a line of poles is about the same per mile whether it is for a single fiber of several fat bundles,.

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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ECA (profile), 26 Apr 2017 @ 12:02pm

I would be nice if'
WOW,
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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Anonymous Coward, 26 Apr 2017 @ 1:47pm

I dropped cable TV a couple of years ago. I haven't really missed it. I do have the DTVNow promotional $35 100+ channel package so I can watch my local baseball. DTVNow has had it's startup problems but it's getting much better lately. Being able to bring a FireTV Stick on the road with me and watch my local baseball and news on the hotel wifi and TV makes me happy.
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Brazillian Guy, 26 Apr 2017 @ 2:21pm

>[Quote]"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."[/Quote]

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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William Braunfeld (profile), 26 Apr 2017 @ 2:37pm

Re: Re: Re: Re: Re:
What if the moon were made of cheese? Sould you want a slice?

Seriously, that question is precisely as relevant as yours.
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William Braunfeld (profile), 26 Apr 2017 @ 2:42pm

Re: Re: Re: Re: Re: Re:
Stupid phone. *would.

Anyone know if there's a way to edit Techdirt posts? I can't find the option.
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Anonymous Coward, 26 Apr 2017 @ 2:47pm

I dropped the whole Comcast TV/phone/internet package, just retaining internet (still Comcast, our only choice.) I was tired of the ever-higher prices due to their inexorable Fee Creep jumps of $30+ every year. I'd keep going to a lower tier, but finally ran out of lower tiers, and the Comcast rep was incredibly snotty. I also purchased my own modem to abort their ridiculous rental fees (and their god-awful low-quality modems.) Went from $165 a month to $44.99 a month. Very happy.

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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Thad, 26 Apr 2017 @ 3:03pm

Re: Re:
...breaking DRM has been illegal since 1998, anon.
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Thad, 26 Apr 2017 @ 3:14pm

Re: Re: Re: Re: Re:
Twelve hours, six weeks, what's the difference?
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jgoi, 26 Apr 2017 @ 5:19pm

Sadly I don't think this will be true anymore unless that 25% is willing to deal with slower speeds and price increases since that's the cable industry's solution.
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Anonymous Coward, 26 Apr 2017 @ 6:17pm

Re: Re: Re: Re: Re: Re:
If it's essentially the same story, there's no difference.
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JEDIDIAH, 26 Apr 2017 @ 8:27pm

Hurdle or Limbo?
Some of us still have the t-shirt.
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JEDIDIAH, 26 Apr 2017 @ 8:29pm

Re: 25% are just losers
My wife would rather set that money on fire than give it to the cable companies. The idea that she subsidizes stuff like Duck Dynasty bothers her that badly.

She would rather pay MORE to support what we like directly.
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JEDIDIAH, 26 Apr 2017 @ 8:30pm

Just another type of CLEC...
Sharing the last mile is already a well solved problem in telecomms. It was done with the old phone network and was quite manageable if a tad complex (the billing, forget about the tech).
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JEDIDIAH, 26 Apr 2017 @ 8:32pm

Digging their hole the Vegas way,
Now they are using those big grinders that they use to break up caliche.
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Anonymous Coward, 26 Apr 2017 @ 10:29pm

Re: Re: Re:
"When you care about something"

You mean the same way out_of_the_blue, average_joe, darryl, Technopolitical, My_Name_Here care about the site?
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Anonymous Coward, 27 Apr 2017 @ 12:50am

Re:
They are the bundling experts; and I predict two tactics going forward. They can tie data caps to the TV bundles that you buy, and/or bundle the popular streaming services into the higher priced TV bundles. That way they protect their precious (as in my precious) cable business.
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Jim, 27 Apr 2017 @ 5:27am

Here is you downfall
You voted for trumph, he, he. Bozo's or you didn't vote. Right, now, get this. No service. America invented, and populated something called noe, the internet. Others implemented their versions at a faster rate, and have to please their customers. Under trumphs courts, you do not have to please your customers. Remember only our and any dictatorship like North Korea can that happen.now, how is Comcast going to please us? Raise their speeds, or the boards pay? How will at&t please us? How would you like to wait thirty minutes to download a two minute commercial? The little rotator propeller just flying, get ready folks, here it comes..
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Wendy Cockcroft, 27 Apr 2017 @ 6:02am

Re: Re: Re: Re: Re: Re: Re:
Nope, not at all. I presume this is an anti-troll measure.
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TimK (profile), 27 Apr 2017 @ 8:13am

I want to cut the cord!
I want to be a 25%-er! YouTube TV is almost ready for me to make the move. As soon as they integrate it into something besides a Chromecast (like a Roku) that allows me to use a remote control and increase concurrent users to more than 3, I'm there. It has everything I need. 90% of the "TV" watched in my household is my kids on Netflix. The remaining 10% is a mix of network and popular cable channels. If I could get it all on one "box" that I don't have to "rent" every month, the savings would be significant. Even after switching to a jacked up rate for 'broadband only' I'd still save money. I probably have to switch from Verizon to Comcast (or at least pretend to) in order to get a reasonable 'customer rate', but it will be worth it.
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My_Name_Here, 27 Apr 2017 @ 4:12pm

Cord Cut and Replaced By More Cord
I think one of the things with all of these cord cutting stories is that you miss the real point: Americans cut the cord only to replace it with other "cords".

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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Anonymous Coward, 28 Apr 2017 @ 7:33pm

Re: I want to cut the cord!
I suspect that you are in an area that Comcast DOESN'T have a usage cap. How can that be? (Comcast LOVES to put a cap on the precious internet data.) Oh, because they have competition from Verizon.
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Anonymous Coward, 30 Apr 2017 @ 2:59pm

Re: Kagan who?
lol, really?
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Anonymous Coward, 30 Apr 2017 @ 3:26pm

Re: Cord Cut and Replaced By More Cord
...so, trying to save a little scratch is a bad thing?
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