US Cable Companies Lost 5 Million Paying Customers Last Year Alone
from the denial-isn't-just-a-river-in-Egypt dept
For most of the last decade, cable and broadcast industry executives insisted that "cord cutting" (users cancelling traditional TV and moving to antennas or streaming) either wasn't real or was only something losers did. Many of the analysts and viewer tracking firms (like Nielsen) -- which have a financial stake in telling cable and broadcast executives what they wanted to hear -- were quick to happily parrot these denials.
Now that it's impossible to deny the trend, most of those folks have become notably quiet.
This week Leichtman Research took a final look at 2019 earnings reports for the biggest cable companies and it wasn't particularly pretty for the sector. All told the top pay TV providers in America, representing about 95% of the market, lost about 4,915,000 net video subscribers in 2019--compared to a loss of 1,585,000 subscribers in 2018. Satellite TV providers were particularly hard hit last year.
Among the biggest hit was AT&T's DirecTV, which lost 3,190,000 subscribers last year alone. Most of those losses were courtesy of the rate hikes AT&T imposed on its customers to pay off the debt it accumulated after spending $150 billion on megamergers in the last five years alone (DirecTV in 2015, Time Warner in 2019). Instead of dominating the space as AT&T had hoped, it "enjoyed" a revolt from customers and investors alike.
But things weren't much better for the cable sector, which collectively lost 1,560,000 video subscribers in 2019 -- compared to a net loss of about 920,000 subscribers in 2018. Or the nation's traditional phone companies like Verizon and AT&T (who also offers TV service via IPTV), who lost 665,000 subscribers last year -- compared to 245,000 the year before. Even the companies that tried to at least somewhat get ahead of the trend (like AT&T) wound up paying the price, even losing subscribers from their new streaming TV platforms due to rate hikes.
It's always been pretty clear that most cable TV providers intend to ride this cash cow until its last gasp before doing obvious things like shoring up historically terrible customer support or actually competing on price. And to some degree, you can understand why. The traditional pay TV sector is still home to a whopping 86.2 million subscribers with the top seven cable companies still laying claim to 45.8 million video subscribers, satellite TV services 25.4 million subscribers, and the top telephone companies 8.3 million subscribers.
And while streaming will continue to slowly erode these totals, these companies all have an ace in the hole: their growing monopolies over broadband. The lack of US competition means that as margins on TV get tighter, they can simply squeeze their captive broadband customers tighter, something that usually manifests in not just vanilla price hikes, but the steady growth of bullshit fees, usage caps, and utterly arbitrary and unnecessary usage caps and overage penalties.
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.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: cable, cord cutting, tv
Reader Comments
Subscribe: RSS
View by: Time | Thread
I don't get it.
"usage caps, and utterly arbitrary and unnecessary usage caps"
Are there any non-utterly arbitrary/unnecessary usage caps?
[ link to this | view in thread ]
...and effectively forcing people to subscribe to an unwanted TV service, e.g. by making internet+TV cost less than internet alone (which one could call securities fraud, in that it's artificially raising subscriber numbers, but who's gonna prosecute that?).
[ link to this | view in thread ]
There would be even lower numbers, but I've found that getting a new deal every year after calling them, Getting a basic Bundle is cheaper than Internet-only!!! So I times I end up getting the dumb bundle. I don't use the TV part of it or bother hooking up the cable box for the TV service. I continue to use my Antenna which gets a better picture anyway and I can DVR those channels from the Antenna, something I can't do with the basic cable box and I'm not paying more money for a Cable DVR box. It's just too much money wasted. I cut the cord years ago because I got tired of the $180 a month bill for 1 person. I couldn't possibly watch that much TV and use that much Internet.
So I get the Bundle when it's cheaper than the Internet only. It makes them look like I want to pay for that service that I don't use!!!
[ link to this | view in thread ]
I'm still paying for Cable TV and I never use it. My building has a contract and the only way to access the internet is using an Internet/Cable package for $100 per month.
They're not losing any paying "customers"
[ link to this | view in thread ]
Monopolies
They often use bundles to prop up their TV numbers (e.g. if it's another $10 a month to get TV, why not?), but all the fees and rental charges will eventually cause people to move to broadband only. Given the apples to apples comparison, people will force them to compete on price, if there's meaningful competition.
That's where their content monopoly kicks in- they'll force bundles for their popular TV channels, essentially bringing us full circle to cable bundles.
[ link to this | view in thread ]
Do you hear that? Can you hear it at all? It's the world's smallest violin playing sad songs for the cable industry. Next up: The funeral march.
[ link to this | view in thread ]
Re: I don't get it.
"Are there any non-utterly arbitrary/unnecessary usage caps?"
Wifey has one, but it is not on the broadband.
[ link to this | view in thread ]
Given the current news I bet
Given the current news I bet they might get a few new subscribers, but no one will be left to complete the installs.
[ link to this | view in thread ]
Re: I don't get it.
Only when you work in the IT dept.
[ link to this | view in thread ]
Re: Monopolies
Why? What stops providers from charging a "no TV" fee greater than the rental and other fees for TV? What are people gonna do, switch to a competitor? (Elon Musk has confirmed StarLink won't be able to offer great speeds in densely populated areas, so that's out.)
[ link to this | view in thread ]
Re: Given the current news I bet
How are you going to pay the exorbitant pills when you are not working?
[ link to this | view in thread ]
Re: Re: Given the current news I bet
I'll be keeping all of you plague ridden pleebs from spreading the Chinese Flu so my Cable bill will still get paid!
[ link to this | view in thread ]
Love it..
You pay for Cable.
And you pay to watch adverts.
The list has been shown of what the cable corps pay(??) for each channel, but I cant understand how we get XXX channels, and 2/3 of them are garbage..
I would think Cable would CUT the channels NOT doing well. UNLESS those channels are PAYING to be on cable.. which would mean that its a zero sum system, and most of the money we PAY Cable is profit. Not to forget they generally have local Adverts.
https://www.fool.com/investing/2019/01/22/heres-how-much-americans-pay-for-cable-channels-t h.aspx
What I can really think, is that having xxx channels makes it LOOK CHEAP.. with nothing in the middle. but WHO are we paying?
[ link to this | view in thread ]
Re: I don't get it.
"Are there any non-utterly arbitrary/unnecessary usage caps?"
Not really, no. It's not as if data transmission causes much in the form of wear'n'tear.
The only limitation has ever been bandwidth. Usage caps MAY serve a secondary purpose in keeping people from actually using the oversold bandwidth they've paid for but the carrier doesn't have the capacity to deliver fully.
Primarily it's just been yet one more way to include a surcharge for no reason at all.
[ link to this | view in thread ]