x
Video services

Where Did Everyone Go?

10:30 AM -- "Cord-cutting" advocates got a slab of fresh meat to chew on Wednesday when SNL Kagan released a new report finding that the US multichannel sector lost 119,000 customers in the third quarter -- versus a gain of 346,000 in the same quarter a year ago.

According to SNL Kagan, it marked the first time that such a decline occurred in consecutive quarters; the industry lost 216,000 customers in the second quarter of 2010.

So, what happened to those lost multichannel customers? SNL Kagan didn't offer a granular analysis on that, but acknowledged that operators continue to point to the weak economy, high unemployment, and the churning of consumers who go back to getting video freely over the air, which is considered another form of cord-cutting.

And what about the emergence of "over-the-top" video options? SNL Kagan believes it's playing a role.

Ian Olgeirson, a senior analyst with the firm, opined that "it is becoming increasingly difficult to dismiss the impact of over-the-top substitution on video subscriber performance, particularly after seeing declines during the period of the year that tends to produce the largest subscriber gains due to seasonal shifts back to television viewing and subscription packages."

Cable was hit particularly hard in the quarter, losing 741,000 basic video subscribers, the largest quarterly drop since SNL Kagan started compiling that data in 1980. US Cable ended the quarter with a 60.3 percent share, down from 62.9 percent a year earlier. Telco TV (476,000 sub adds) and satellite TV (145,000 adds) fared better.

If anything, the report reignited the cord-cutting debate, with many believing it proves that the trend has graduated from mythical status.

The cable industry has largely downplayed the notion of widespread cord-cutting brought on by OTT, instead blaming losses on the bad economy and housing markets. Still others blame the exodus on ever-increasing subscription fees.

But it's not just the MSOs that are reluctant to believe that cord-cutting is to blame. Will Richmond, a new media industry analyst who runs VideoNuze, says it's hard to reach a conclusion until there's more hard, reliable data to prove whether cord-cutting is among the primary causes of those losses.

Any cord-cutters in the house? What's your reason?

— Jeff Baumgartner, Site Editor, Light Reading Cable

Page 1 / 2   >   >>
jobenso 12/5/2012 | 4:18:05 PM
re: Where Did Everyone Go?

Once they started giving us options on how to get our content, (OTT) we walked.


Plus have you seen whats on TV lately, with the exception of a few shows on basic/pay cable there is nothing to watch. Why get your movies from cable; netflix and red box do a great job.


Give me a good reason to stay, I have a job and I cut the cord.


Mandatory STB rentals fees, nothing to watch, overlapping services on the internet and service contracts have me moving on.


That's $90.00 I'm saving, and still watching the same stuff.


 

Scott Raynovich 12/5/2012 | 4:18:04 PM
re: Where Did Everyone Go?

Hmm, let's see, after years of laughable customer service, exorbitant pricing, resistance against sensible things like a la carte  pricing, and total abuse of monopoly power, the cable companies are shocked to find that consumers are finding that other options exist?


This is shocking.


It all makes sense to me every time I get my $125 DirectTV bill. Just think, TV used to be free.

shygye75 12/5/2012 | 4:18:04 PM
re: Where Did Everyone Go?

Hey, Jeff -- What's the total number of pay TV subs in the US now, and what percentage of households does that equate to?

Scott Raynovich 12/5/2012 | 4:18:04 PM
re: Where Did Everyone Go?

Hmm, let's see, after years of laughable customer service, exorbitant pricing, resistance against sensible things like a la carte  pricing, and total abuse of monopoly power, the cable companies are shocked to find that consumers are moving to other options now that they exist?


This is shocking.


It all makes sense to me every time I get my $125 DirectTV bill. Just think, TV used to be free.

Jeff Baumgartner 12/5/2012 | 4:18:02 PM
re: Where Did Everyone Go?

And, by the way,  some details emerged today about the low-end offering Time Warner Cable's getting ready to launch, courtesy of Craig Moffett, who got some details about it from TWC CMO Sam Howe on a panel Craig moderated at today's SNL Kagan event.  That one, "TV Essentials"  is coming mid-Dec., currently being test-marketed at $39.95 to $29.95/mo. And no Disney Channel and no ESPN, which is the most expensive cable channel out there. JB


 

Jeff Baumgartner 12/5/2012 | 4:18:01 PM
re: Where Did Everyone Go?

Nope, in those terms it doesn't look bad at all... but, like you said, it's a hot topic so every time there's new data indicating that a trend is underway that sticks it to the big bad MSOs, even on an anecdotal basis, it creates a cord-cutting frenzy -- it's premium grade chum!   But we can all bet that the pay TV universe numbers are going to be heavily scritinized from this point forward. JB  


 

Jeff Baumgartner 12/5/2012 | 4:18:01 PM
re: Where Did Everyone Go?

SNL Kagan's got it that there's about 100 million subscriptions, and Nielsen estimates there are 114.0 million US TV homes, so 87.7% back-of-the-napkin. JB


 

shygye75 12/5/2012 | 4:18:01 PM
re: Where Did Everyone Go?

Thanks, Jeff. With pay TV uptake already near 90%, prospects for overall growth in this market are limited at best. The overall subscriber loss rate that you report amounts to 0.1% of the US pay TV universe in Q3. Given the state of the economy, is that really so bad? I know the cord-cutting thing is a hot topic, and there may actually be something developing. If loss rates continue to track up over the next year, then an actual trend may be under way.

Scott Raynovich 12/5/2012 | 4:17:54 PM
re: Where Did Everyone Go?

Cable without ESPN? Isn't that kind of like pancakes without syrup?


 

Duh! 12/5/2012 | 4:17:53 PM
re: Where Did Everyone Go?

There are many people - myself included - who have less than no interest in ESPN.  It irks me no end to be paying Disney for this stuff, and getting nothing out of it except clutter on the navigation page.


Although, annoyingly enough, the FiOS basic digital package we're on includes all ESPN channel EXCEPT ESPN Classic.  It turns out that a few weeks ago, my brother made a cameo appearance on ESPN Classic.  No way to view except by upping us to the super premium package.  NOT.

Page 1 / 2   >   >>
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE