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3% of Pay-TV Subs Cut Cord

Light Reading
LR Cable News Analysis
Light Reading
6/29/2011

Here's a quick look at today's cable news.

  • Just 3 percent of U.S. pay-TV subscribers have cut the cord on cable or satellite, J.D. Power and Associates said. But its study found younger viewers are more likely to cancel subscriptions. About 6 percent of Generation Y (ages 17 to 34) customers are cord cutters, compared to 2 percent of Baby Boomers and 1 percent of customers ages 66 to 86. (See Survey: 7% of Pay-TV Subs Will Cut Cord.)

  • Shaw Communications Inc. lost 13,577 subscribers during the third quarter, but its profit jumped 28 percent to $203 million.

  • Those refrigerator-sized equipment pedestals that AT&T Inc. (NYSE: T) has placed in neighborhoods where it is rolling out U-verse TV have sparked a backlash from some customers in North Carolina.

  • The bankruptcy-court auction for TerreStar Corp. was canceled after the mobile satellite provider received a $1.375 billion bid from Dish Network LLC (Nasdaq: DISH). The court will review Dish's bid at a hearing next week. (See Dish Nears TerreStar Acquisition .)

  • Cox Communications Inc. will soon begin marketing wireless voice and data service in Topeka and Wichita, Kansas. (See Cox: We're Not Selling Our Spectrum.)

  • Comcast Corp. (Nasdaq: CMCSA, CMCSK) is converting its Jackson, Miss., system to all-digital on July 13.

  • Time Warner Cable Inc. (NYSE: TWC) subscribers in Northeast Ohio and Western Pennsylvania can now use their remote controls to order Home Box Office Inc. (HBO) , Showtime Networks Inc. and other premium networks.

  • Cablevision Systems Corp. (NYSE: CVC) is set to spin off AMC, IFC, WeTV and Sundance Channel parent Rainbow Media into the newly named AMC Networks on Friday.

  • Cablevision added Poland's TVN24 and TVN International to its iO International lineup.

  • comScore Inc. says 47.5 percent of iPhone data traffic in May occurred on Wi-Fi networks, while just 21.7 percent of traffic from Android phones came from Wi-Fi networks.

    — Steve Donohue, Special to Light Reading Cable

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    kateschackai
    kateschackai
    12/5/2012 | 5:00:43 PM
    re: 3% of Pay-TV Subs Cut Cord


    To borrow Mark Twain's line -- "Reports of my death are premature" -- the supposed demise of cable and pay TV due to cord cutting is a bit overblown.  More detail in this insightful post by Convergys:http://www.convergys.com/insights/guest/not-so-fast-smart-cable-operators-may-surprise-the-doomsayers/

    Pete Baldwin
    Pete Baldwin
    12/5/2012 | 5:00:42 PM
    re: 3% of Pay-TV Subs Cut Cord


    I beg to differ. Pay TV in the U.S. is practically a zero-sum game -- and that market got 3 percent smaller. In what way is that a good thing?


    Cord-cutting is real, and it has started.


    Maybe these people come back to cable when the economy recovers, I'll concede that that's possible. But I think there's a percentage who intend to never go back. Cable/satellite/etc. had better be working hard to prevent that percentage from growing.

    RosarioElliot
    RosarioElliot
    12/5/2012 | 5:00:39 PM
    re: 3% of Pay-TV Subs Cut Cord


    Craig is spot on! Your foolish to believe that consumers when presented with a more affordable option like WhiteHatt (http://www.whitehatt.com), Google TV or even a strong HTPC with a tuner won't cut the cable cord. Its real, and it's coming, Cable and Satellite should be mindful not to think they're to big, or established to fail.


    Cable hopes that cord cutting isn't real, but hopes don't influence results. In the end, as Cable surplanted Broadcast television in the 80's, Internet Television will do the same to Cable over the next 4 years. Don't be to concerned for them, Broadband is a 90% profit business and Imternet television doesn't work without internet.

    shygye75
    shygye75
    12/5/2012 | 5:00:37 PM
    re: 3% of Pay-TV Subs Cut Cord


    So what you are saying is that cable operators will derive more of their revenue from high-margin broadband service (the big, dumb pipe) rather than the margin-challenged content side. As you say, no need to cry for the cable ops if this is the case. It also means that "cord-cutting" isn't the most accurate description of what's happening, since the cord is the broadband service rather than the content service.

    Pete Baldwin
    Pete Baldwin
    12/5/2012 | 5:00:36 PM
    re: 3% of Pay-TV Subs Cut Cord


    Thanks for the support and, uh, nice product placement, I guess. Subtle (just like last time).

    paolo.franzoi
    paolo.franzoi
    12/5/2012 | 5:00:35 PM
    re: 3% of Pay-TV Subs Cut Cord


    mendyk,


     


    I think 2 things:


    1 - Odd as it may seem, broadband access providers are making money hand over fist.  They do not seem to worry about an ROI...they worry about how big an ROI and when they will achieve it.


    2 - Content costs basically suck the margin out of video.


    So, if they no longer had to support STBs and could cut the encoders and other gear out of their business - yes they might actually be more profitable.  Lower in revenue for sure, but it might actually lower the total business cost by so much to be worth it.


     


    seven


     

    shygye75
    shygye75
    12/5/2012 | 5:00:34 PM
    re: 3% of Pay-TV Subs Cut Cord


    The next few years will be a great time to be a broadband service provider, for companies that can accept the economic realities that you identify. Bandwidth demand will continue to soar (including of course Wi-fi and mobile backhaul). It's not a story that gets "investors" excited, which is probably the main reason operators are reluctant to at least publicly acknowledge the reality.

    Pete Baldwin
    Pete Baldwin
    12/5/2012 | 5:00:33 PM
    re: 3% of Pay-TV Subs Cut Cord


    I would challenge you about 20somethings not being at that stage -- I think a lot of them are at that stage... provided they're not sports fans. (You might be thinking of frathouse 20somethings; I'm thinking of cynical hipster geek 20somethings.)


    I totally concede that live sports is the Achilles' Heel of cord-cutting. There is a substantial percentage of the population who not only won't cord-cut due to live sports, but will pay extra to get premium live sports (NFL Red Zone, e.g.) no matter how much they might hate their cable/satellite company.

    derac
    derac
    12/5/2012 | 5:00:33 PM
    re: 3% of Pay-TV Subs Cut Cord


    You're single, 22 and sharing a house with 3 other guys.   You get internet access and cable.   The cord for the land telephone line has been cut but the TV is still a given hence the cable...  plus it has the internet access.   These are the people that will 'cut the cord' first and they still aren't at that stage.   When live sporting events are available in HD on a big screen then the cord might get cut.  

    Pete Baldwin
    Pete Baldwin
    12/5/2012 | 5:00:32 PM
    re: 3% of Pay-TV Subs Cut Cord


    OK, I'll admit I don't know what basketball and hockey offer.  Didn't realize the NFL allowed you to watch every game (but I think most people would prefer that on a TV, and Red Zone, even if it's on computers, would seem more attractive through a TV provider.)


    What I was going off of was that everybody I talk to, especially those in the industry, seems highly skeptical about the getting sports fans to cut the cord.


    But, also: I've got a lot of experience with MLB TV, and it's got a lot of frustrating limitations. You can't ever see your local teams live* (unless you proxy your way around that). No Saturday afternoon games, period -- Fox blacks them out. They very much want you to keep watching your TV.


    (* For about 3 months a couple years ago, a glitch caused MLB TV to think I lived in Houston. That was a good 3 months.)

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