Cutting the cord? Here’s why your cable company barely cares anymore

After a quarter in which another million customers cut the cord on cable or satellite TV, the research firm eMarketer expects a 4% drop in pay-TV subscribers this year, bringing the total down to 86.5 million. The firm also expects customers to defect at a faster rate of 7.5% next year, with subscriptions dropping to 80 million. By 2023, eMarketer predicts that pay-TV households will drop to 72.7 million, versus 56.1 million households that will have cut the cord.

Cable companies aren’t really sweating it, though. Instead of extending promo deals to keep customers from dropping TV service, they’re simply extracting more revenue from those who haven’t formulated an escape plan. Either way, companies like Comcast profit from selling high-margin internet service. (“For years, we’ve felt that video over the internet is more friend than foe,” Comcast CEO Brian Roberts said in a recent earnings call.)

Cord cutting is more of a threat to satellite providers, which don’t have convenient backup plans for losing traditional TV customers, and to the actual TV networks, which are compensating for the drop in viewers with higher prices and more commercials. We’re looking at all the indicia of a vicious cycle for traditional TV, making eMarketer’s long-term estimates seem pretty conservative.

s.parentNode.insertBefore(t,s)}(window, document,’script’,
fbq(‘init’, ‘1389601884702365’);
fbq(‘track’, ‘PageView’);

Leave a Reply

Your email address will not be published. Required fields are marked *