TV Cord Cutting Poised To Smash Records During Second Quarter

from the inevitable-(r)evolution dept

So we've already noted that with the rise of streaming video competition, more people cut the TV cord last year than any other time in history. MoffettNathanson analyst Craig Moffett has noted that 2016's 1.7% decline in traditional cable TV viewers was the biggest cord cutting acceleration on record. SNL Kagan agrees, noting that traditional pay TV providers lost around 1.9 million traditional cable subscribers. That was notably worse than the 1.1 million net subscriber loss seen last year. And once you factor in the fact that people are buying and moving to new homes without signing up for cable, the full numbers are actually worse.

And things are only going to accelerate as companies like Dish (Sling TV), Sony (Playstation Vue), Google (YouTube TV), Amazon and others flood the market with cheaper, more flexible, streaming alternatives.

Pay TV providers already lost roughly 789,000 subscribers this year. Wall Street analysts expect the second quarter to see more than 1 million subscriber defections away from cable. The second quarter is already historically the worst of the year for cord cutting, as college students cancel school service and pad the defections. This year, however, the belated rise in real streaming competition means things will be arguably worse:

"Pay TV providers could lose more than a million subscribers in the current period, a team of analysts at UBS led by John C. Hodulik wrote in a research note distributed Tuesday. "That would be the worst result on record and equate to a 2.5% annual decline," compared to 2.1% last quarter, the analysts wrote.

And things for the industry could only get worse, the analysts wrote.

"We estimate this will put the industry on pace for a 3.3% decline in 2017 and 4.0% in 2018," they said in their note.

You might just notice a bit of a trend after UBS put its estimates into visual form:

As we've long noted, none of this will be fatal for industry giants like Comcast, who plan to counter lost TV revenues by jacking up broadband prices via arbitrary and otherwise unnecessary usage caps, using bundled pricing to force people to take TV bundles they may not even want. The broadcast and cable TV sector could also easily counter these losses by doing something uncharacteristic and unthinkable for the sector: listening to these defecting customers and actually competing on price and package flexibility.

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Filed Under: cable, cord cutting, tv


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  • icon
    DannyB (profile), 13 Jun 2017 @ 6:45am

    It's just a temporary downturn

    It's just a temporary downturn.

    And the Titanic is just bobbing up and down, and this particular down may look perilous, but the ship will bob back up again on the next gigantic wave.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Jun 2017 @ 9:54am

      Re: It's just a temporary downturn

      I would cut the cord and have in the past. But currently it's cheaper t get their dumb bundle then it is for Internet only. So I have the bare Minimum cable TV package which is mostly local channels, plus HBO (Had a choice of HBO or Showtime) as a very basic cable Box. You know what, that cable box is still in the packaging it came in. I've never hooked it up and don't plan to. Plus I'd have to run new cable to use it and I have no reason to.

      I get my Local channels with a Antenna already and use a TIVO and Mini's for my DVR solution. I'd lose the DVR if I used Cable. Screw that. HBO I just use the HBOGo App on my Roku's or Apple TV's. Comcast doesn't allow HBOGo to work on Tivo's. It's there on Tivo, but for other company's to use. Comcast has a stick up their butts against Tivo.

      So I have their 200Mbps service right now which they said was $10 more to get then the 100Mbps connection. So I figured I'd try it. Of course I went over my CAP and they threatened $10 for 50 Megabtyes over, so I was $20 extra change. I guess they say you get 2 free over months. Oh boy. Faster speed just means hitting the cap even faster and easier. So I called up telling them I wanted to go back to 100Mbps and save the $10. I couldn't do it. I could save $10 and drop way down to 25Mbps service, WTF!!! Comcast SCAMMING as always.

      If only I had a real option, I'd flee as fast as I could.
      The only reason more people arn't cutting is because they're doing all they could to keep people on with a bundle for a cheap which is cheaper and then jack prices up after the year. I call every year and get my costs cut back done for another year.

      I would still rather have Internet only. I won't watch their cable TV local channels, I RARELY even watch HBO. I wouldn't miss it. I don't have enough time to watch all this crap. But they're scamming people with bundles to keep them on TV subscriptions so it doesn't look as bad as it could be.

      link to this | view in chronology ]

      • icon
        DannyB (profile), 13 Jun 2017 @ 12:16pm

        Re: Re: It's just a temporary downturn

        As you describe, I first went to a bare minimum. A package that they had, but did not advertise. Very bare minimum. But after a while, using internet streaming, we finally got rid of that last remaining bit of cable and haven't regretted it since.

        link to this | view in chronology ]

        • identicon
          Anonymous Coward, 14 Jun 2017 @ 9:02am

          Re: Re: Re: It's just a temporary downturn

          I wonder how long it will take the advertisers buying adds on cable to realize the viewership numbers are over inflated due to it being cheaper to get cable with your internet, and not use it, than getting internet by itself. Sounds a bit like the cable companies are committing fraud in a way.

          link to this | view in chronology ]

    • identicon
      Andy, 17 Jul 2017 @ 5:28am

      Re: It's just a temporary downturn

      My isp charged for a tv bundle making it cheaper to take that than just internet access which i wanted, then they created a package that included free tv but full of pay tv, imagine watching a series and then being told you have to pay for the next season for a crazy price. A tv series is not worth even £5 to me as i can and do watch so much on netflix.

      So i took the bundle and got the price drop and put the free box i got in a cupboard until my contract ends and i can put it on ebay, the problem being that so many are doing this that ebay is flooded by my isps smart internet box.

      link to this | view in chronology ]

  • icon
    Ninja (profile), 13 Jun 2017 @ 6:52am

    Is it me or there seems to be an alignment issue with this article?

    Anyway, from the graphic you can see the number of subscribers has receded to 2008 levels in 2016. Considering the subscriber base kept groing *even during the worst years* of the crisis that started in 2008 and that we are already recovering from said crisis (albeit slowly) I wouldn't say the giants are as comfortable as the article says. Even if the total number of subscriber hasn't decreased that much (it's only a ~10% drop from the peak to 2018 if it materializes) there are a few points to consider revenue-wise: the trend is probably getting worse and not all of the remaining subscribers are there because they love cable.

    I explain the latter. Many of the subscribers just never touch the TV equipment, they are in the bundle just because it's more expensive to get internet only than the bundle and there's the trimming phenomena. Part of the overall revenue drop will be withheld by the price hikes in broadband and the cable bundle (or do we expect them to turn smart all of a sudden?) for a while but there's only so much you can do with your prices and bill shenanigans you can do before people start demanding you be regulated like hell with their votes and their wallets somehow.

    And as prices are artificially inflated things get easier for other entrants. Thing Google Fiber for example. If they could raise their prices from 70 to 100 and still be way below the other ISPs and better in quality with no caps then they'll get more money and be more profitable possibly spawning more expansion. This may be valid for other local ISPs.

    It'll be fun to watch further developments. Technically, financially, socially and politically.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Jun 2017 @ 7:22am

      prices artificially inflated

      Is there any economic reason why FCC should not step in to control and limit these artificially inflated cable TV prices ?

      Other Federal regulatory agencies do so. For example, the US Dept of Agriculture heavily intervenes in private food markets to sharply influence consumer prices... and has done so for about a century.

      Shouldn't the FCC serve American consumers ?

      link to this | view in chronology ]

      • identicon
        Anonymous Coward, 13 Jun 2017 @ 11:36am

        Re: prices artificially inflated

        Is there any economic reason why FCC should not step in to control and limit these artificially inflated cable TV prices ?

        Because it's a waste of government effort to regulate a dead medium. They should just make sure people can't be "forced" to subscribe to get internet (e.g. by making the bundle cheaper than internet alone).

        link to this | view in chronology ]

      • icon
        AnaChronic (profile), 13 Jun 2017 @ 3:38pm

        Re: prices artificially inflated

        I am all for regulation of basic necessities--food, agriculture, public infrastructure, utilities like water, electricity and yes internet. Cable is not a necessity. I don't see the need for my tax dollars to "regulate" something that is a freely entered partnership between private entities. If there are consumers out there who choose to pay hundreds of dollars of their own money a month for access to mind numbing noise 24/7 then I say godspeed to them. If you don't like it, don't pay for it.

        link to this | view in chronology ]

        • identicon
          Anonymous Coward, 13 Jun 2017 @ 7:59pm

          Re: Re: prices artificially inflated

          If there are consumers out there who choose to pay hundreds of dollars of their own money a month for access to mind numbing noise 24/7 then I say godspeed to them. If you don't like it, don't pay for it.

          I have a heart condition. My implant requires 24/7/365 always on internet.

          I work in tech. I can't do my job and earn a living without internet.

          I am mobility restricted. I need internet to get food ordered and brought in. I need internet to do my banking, pay bills and taxes.

          Wired telephone service was removed and consumers told "Get a cell phone." - but cell service is not available on this side of the hill.

          I can get a pretty bad internet connection via microwave tower or via the local cable monopoly. While I would love to dream that your "free market" is working, anyone with eyes to see knows that the telecom industry is anything but a free market.

          Please see a doctor - your myopia is life threatening.

          link to this | view in chronology ]

          • identicon
            Thad, 15 Jun 2017 @ 3:05pm

            Re: Re: Re: prices artificially inflated

            You seem to have misunderstood his (her?) post. He said that Internet is a necessity and should be regulated; when he said "cable is not a necessity" he was referring to cable TV, not cable Internet service.

            link to this | view in chronology ]

          • icon
            AnaChronic (profile), 15 Jun 2017 @ 3:28pm

            Re: Re: Re: prices artificially inflated

            You missed this in my post: I am all for regulation of basic necessities--food, agriculture, public infrastructure, utilities like water, electricity and YES INTERNET.

            I agree with you on internet service. The poster I responded to specifically said regulation of cable tv service, a completely separate service that just happens to be offered by the same companies. The whole point of this article and the phenomenon of cord cutting is that these are *separate* services.

            Does your heart condition interfere with reading comprehension, or is that just your ideology?

            link to this | view in chronology ]

    • icon
      orbitalinsertion (profile), 13 Jun 2017 @ 8:29am

      Re:

      There is an alignment issue on the main page, and a less disruptive alignment issue when article is viewed on its own page.

      link to this | view in chronology ]

    • icon
      zboot (profile), 13 Jun 2017 @ 8:41am

      Re:

      "Is it me or there seems to be an alignment issue with this article?"

      I had the alignment issue until I updated my version of Chrome.

      link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Jun 2017 @ 6:52am

    This article can not be read.
    Something is wrong with the right margin in this article.

    link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Jun 2017 @ 6:57am

    :: The year is 2028. Camera zooms in to a cable company board room and pans across the executives all sitting at a long table. The feeling in the room is tense. ::

    Executive #1: Gentlemen, we've finally done it. Last quarter we reported ZERO people cutting the cord, ending a record-setting streak.

    Executive #2: Well, Jim. There's a simple explanation for that. Every last person in the country has finally cut the cord. There are no more people to lose.

    :: Title card pops up on screen ::

    A Netflix Original Series:
    Death of a Gatekeeper: The History of Cable

    link to this | view in chronology ]

  • identicon
    Anonymous, 13 Jun 2017 @ 7:01am

    You finally did it

    Techdirt finally did it - an unclosable pop-up ad that obscures the text of the article.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Jun 2017 @ 7:31am

      Re: You finally did it

      It's actually the width of the article being larger than it should for some reason (image width possibly). Bug in the text, not in the ad.
      Not the first time this bug showed, probably not the last.

      link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Jun 2017 @ 7:05am

    What I can expect....

    If I don't abandon cable TV, then I will be hit with higher prices, or more likely, new or higher below the line fees to makeup for the cutters. It will be better to join them than to be left behind with my providers hands in my wallet.

    link to this | view in chronology ]

  • icon
    ShadowNinja (profile), 13 Jun 2017 @ 7:07am

    Some of the text is cut off

    I can't read some of the text on the right side of the story, it's cut off the right sidebar. This is the only techdirt story it's an issue for, please fix. :(

    link to this | view in chronology ]

    • icon
      ShadowNinja (profile), 13 Jun 2017 @ 7:10am

      Re: Some of the text is cut off

      Just to add, I think it's the picture in the story that's cutting off the text. Part of the picture is cut off for me as well by the right sidebar.

      link to this | view in chronology ]

      • icon
        Stephen T. Stone (profile), 13 Jun 2017 @ 7:14am

        Re: Re: Some of the text is cut off

        It is the image, yes. I had to fix this with a userstyle addition:

        .story img { max-width: 100% !important }

        (I hope the Markdown syntax for inline code works here.)

        link to this | view in chronology ]

        • icon
          Anonymous Anonymous Coward (profile), 13 Jun 2017 @ 8:03am

          Re: Re: Re: Some of the text is cut off

          Copy and paste into a LibreOffice or other works too.

          link to this | view in chronology ]

  • icon
    Totes McGoats (profile), 13 Jun 2017 @ 7:10am

    Good luck with young people

    Their problem is exacerbated by the fact they have little chance of getting young people. For example, when I got my first apartment in 2001 signing up for cable was automatic – I gave it no thought whatsoever. Internet video didn’t really exist (not even YouTube!) and even though I didn’t watch a ton of TV I wanted more than three broadcast networks. Now in 2017 I can’t imagine any young person getting their first place, especially one used to Netflix/Amazon Prim / Hulu, feeling the need to sign up for cable channels that cost over a hundred dollars a month.

    Seriously, if there are thousands of hours of TV out there, and no way you can watch all of it, the Netflix/Hulu/Amazon half cost $30 a month and the cable TV half costs over $100 a month – why would you even consider Cable TV? You can’t watch it all anyway.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Jun 2017 @ 7:19am

      Re: Good luck with young people

      "For example, when I got my first apartment in 2001 signing up for cable was automatic – I gave it no thought whatsoever."


      "I GAVE IT NO THOUGHT WHATSOEVER..."


      I think that is a lot of peoples problem in a nutshell. Running around, not thinking about anything. I know I am guilty of it, but a lot of people sure get pissed off about this when you point it out to them.

      link to this | view in chronology ]

      • icon
        Totes McGoats (profile), 13 Jun 2017 @ 10:43am

        Re: Re: Good luck with young people

        Should have said it was an obvious decision - about the level today of whether I want internet.

        Of course I thought about it - do I want to watch three networks and DVDs with ads I can't skip (and no Netflix/Redbox)?" and the answer was no.

        link to this | view in chronology ]

  • icon
    Roger Strong (profile), 13 Jun 2017 @ 7:18am

    I could make a joke about fax, teletype, telegraph and telegrams, but those were replaced by better technologies.

    Cable TV is still a perfectly viable technology. Sure, there's competition now, but it's their pricing and bundling practices that are killing it.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Jun 2017 @ 7:22am

      Re:

      No, it is regulation that is killing it. Regulation is what gives these guys the ability to "their pricing and bundling practices that are killing it." do these things that are "killing it" as you put it.

      Everything the government regulates turns into a monopoly or oligarchy.

      link to this | view in chronology ]

      • identicon
        Anonymous Coward, 13 Jun 2017 @ 7:48am

        Re: Re:

        "No, it is regulation that is killing it"

        Wrong. Corporate mis-steps are not caused by government regulation, the excuses are humorous but totally inadequate.


        "Everything the government regulates turns into a monopoly or oligarchy."

        It seemingly is the exact opposite, the monopoly exists first and is subsequently placed under regulation by the government in order to placate the concerns/complaints from their constituents but said regulation contains intentional loop holes thru which corporations can drive a semi truck thereby keeping the steady flow of "campaign" contributions.

        Oligarchy is not caused by regulation, regulation is a tool used to obtain/maintain an oligarchy. Oligarchy, is caused by greedy billionaires attempting to take over the world by any means possible, regulatory capture is simply one of them.

        In addition, high prices are also the fault of hollywood and content providers, they think very highly of themselves and their products.

        link to this | view in chronology ]

      • identicon
        Anonymous Coward, 13 Jun 2017 @ 7:54am

        Re: Re:

        Don't you have some paint chips to go eat?

        link to this | view in chronology ]

      • icon
        Roger Strong (profile), 13 Jun 2017 @ 7:58am

        Re: Re:

        Your claim is utterly out of touch with reality.

        Here in Canada the cable companies dictate policy to the CRTC, the government body that in theory regulates them. It's the same in the US with the FCC. You're getting a good demonstration of that now. It's not regulation; it's a lack of it.

        You want anarcho-capitalism. We want checks and balances. Giving unregulated power to corporations leads to monopolistic and dangerous behavior just like giving unregulated power to government leads to dictatorial and dangerous behavior.

        The cable industry is a fine demonstration of that happening.

        link to this | view in chronology ]

        • identicon
          Anonymous Coward, 13 Jun 2017 @ 11:39am

          Re: Re: Re:

          Here in Canada the cable companies dictate policy to the CRTC, the government body that in theory regulates them.

          Sometimes but not entirely. Cable TV companies have to give third-party ISPs access to their wires, have had to lower their third-party access rates, have to offer "cheap" cable TV packages (maybe eventually... for now they're stalling and we'll see what the CRTC does), etc. If they controlled the CRTC those rules would be gone.

          link to this | view in chronology ]

          • icon
            Roger Strong (profile), 13 Jun 2017 @ 9:52pm

            Re: Re: Re: Re:

            On the other hand they get the CRTC to rubber-stamp consumer-hostile things like negative-option billing:

            Cable companies: "We'd like to automatically add a bunch of obscure new channels to EVERYONE'S cable plans without asking them, bill them extra for it, and give them an obscure method to opt out."

            CRTC: "Okie dokie."

            Plans that only get cancelled after the fact when there's a large consumer backlash.

            link to this | view in chronology ]

      • identicon
        Chip, 13 Jun 2017 @ 10:45am

        Re: Re:

        If it weren't for regulations, cable companies wouldn't be able to have bundles! And there wouldn't be so much lead in my edlicious, delicious paint chips!!

        Every nation eats the piant echp s Deserve!

        link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Jun 2017 @ 4:40pm

      Re:

      I could make a joke about fax, teletype, telegraph and telegrams, but those were replaced by better technologies. Cable TV is still a perfectly viable technology.

      Viable for live video, sure, but how much of that does the world really need? Sport games, large public events, etc... you could fill maybe 10 channels with that stuff, which by the way works just as well over multicast IP. Nobody who grew up with video-on-demand is going to tolerate the idea of stuff being shown on someone else's schedule, in 5 parts interrupted by advertisements. DVRs help, but at best you're getting a shitty simulation of VoD.

      The future of coaxial cable is DOCSIS. It'll get into the low 10s of gigabits/s, with some difficulty, but it would be foolish to run cable instead of fiber to any new development.

      link to this | view in chronology ]

  • icon
    TheResidentSkeptic (profile), 13 Jun 2017 @ 7:21am

    On-Demand vs On-Supply

    This is one part the cable companies just don't get. Viewers are no longer interested in being tied to THEIR schedule.

    We want to watch WHAT and WHEN "OUR" schedule permits.

    Broadcast with a fixed schedule just doesn't match lifestyles anymore.

    "Prime Time Viewing" is dead. bury it already.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Jun 2017 @ 8:06am

      Re: On-Demand vs On-Supply

      Which means, in other words, the TV industry cannot easily counter these losses as the article claimed. Broadcast TV can't anyway. Cable TV maybe could try video on demand, but they likely don't have the rights and then what would be the difference between them and an online video source? They'd effectively be the same thing, except more geographically restricted and with the #1 worst customer service.

      link to this | view in chronology ]

    • icon
      tom (profile), 13 Jun 2017 @ 8:24am

      Re: On-Demand vs On-Supply

      Oh they get it. And charge you a DVR rental fee + a DVR service fee. And if you want to keep more then 30 hours of recordings, you get an Enhanced DVR fee.

      link to this | view in chronology ]

  • identicon
    Moi, 13 Jun 2017 @ 7:39am

    Simple fix to read article

    Right-click on the title of the article and click inspect.
    In the html click on <div class="story">
    On the right side you see a styles dialog, click display: table to disable it.

    link to this | view in chronology ]

  • icon
    guntherpea (profile), 13 Jun 2017 @ 8:19am

    So this article keeps saying, "worse," but I keep reading, "better."

    link to this | view in chronology ]

  • identicon
    UniKyrn, 13 Jun 2017 @ 9:30am

    Just canceled with Comcast yesterday. Got the monthly bill last Saturday, noticed another price increase and started thinking about when I'd last watched cable TV. When I couldn't recall watching anything in the last few months, that cinched it.

    The local OTA stations get me the PBS shows I like, on-line services get me the occasional movie or TV series.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Jun 2017 @ 10:09am

      Re:

      I would cut the cord if I could but its cheaper to get a dumb bundle then Internet only. Otherwise I'd go back to that. Of course you have to make sure to call them every year after the bundle deal is over otherwise the price jumps way up. That is what they hope to happen. But I watch my bills and when I see some jump I look to see what's going on and then call.

      link to this | view in chronology ]

      • identicon
        Anonymous Coward, 13 Jun 2017 @ 4:21pm

        Re: Re:

        I would cut the cord if I could but its cheaper to get a dumb bundle then Internet only. Otherwise I'd go back to that.

        Cable companies must be doing this to raise their "TV subscriber" counts, with the expectation they'll benefit somehow. But on a digital network they know exactly which subscribers are watching which channels at any time, so they damn well know if someone buys the bundle to save money and never actually watches the TV. I'm predicting someone will sue them for fraud, when they realize the cable companies had the real numbers all along but gave inflated subscriber counts.

        link to this | view in chronology ]

    • icon
      The Wanderer (profile), 15 Jun 2017 @ 8:03am

      Re:

      We still have pay-TV service (although we're about to switch from Comcast to Verizon, apparently) for one reason and one reason only: cable news. My father watches it semi-compulsively, and if there's an alternative that doesn't require a pay-TV subscription, I don't know about it.

      link to this | view in chronology ]

  • icon
    ECA (profile), 13 Jun 2017 @ 1:17pm

    fUNNY

    As people change over..
    A neighbor comes by and See's WHAT you have done..
    1 Good antenna, with booster..In Metro area can get TONS of channels..Might not be HALL MARK channel..but 40-50 LOCAL CHANNELS showing you LOCAL stuff and not national Adverts that have nothing to do with you..
    Then add a few Internet channels, and Other sources and away you go, with Any show you want for less then 1/2 the subscriber prices??

    link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Jun 2017 @ 10:56am

    ten years ago or so i realized i watch so little tv that it made no sense for me to even own a set. as a contractor i made temporary moves for a year at a time, or some such, to various far-flung parts of the country. not dragging around a tv set that i seldom turned on just seemed to make sense.

    damn. i realize now that i was a cord-cutter when i didn't know what a cord-cutter was.

    link to this | view in chronology ]

  • identicon
    G Joubert, 14 Jun 2017 @ 12:58pm

    If "cutting the cord" is to be meaningful it has to include no Netflix, no Amazon Prime, and no blu-ray playing devices.

    link to this | view in chronology ]

    • icon
      The Wanderer (profile), 15 Jun 2017 @ 8:04am

      Re:

      Why? None of those things require paying the cable company, so what do they have to do with cord-cutting?

      link to this | view in chronology ]

    • identicon
      Thad, 15 Jun 2017 @ 3:07pm

      Re:

      Sure, if you redefine "cutting the cord" to mean something completely different from what it means.

      link to this | view in chronology ]


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