Just a few years ago people began canceling their landline phone service and replaced it with their cell phone instead. Now it looks like history may be repeating itself as cable companies lose subscribers to internet video. According to USA Today, Time Warner Cable lost 155,000 subscribers this quarter, whereas Comcast lost 275,000 customers.
Landel Hobbs, Time Warner’s COO, stated that their research shows that subscribers who cancel their television service don’t have broadband services. However TW would have no way of knowing whether the customer had a provider other than Time Warner for their broadband needs. The CEO of Verizon, who experienced a similar shift firsthand during the landline-to-mobile transition, made an interesting observation, stating, “"The first thing when that happens is you deny it. I know the drill. I have been there."
The article goes on to state that cable companies have been losing subscribers for quite some time, but have been making up for the losses with extra services such as VoIP and higher priced digital tiers, but the growth of those segments has been stagnant recently as well.
Although cable companies like Time Warner may claim that streaming is not impacting their business, the recent growth of Netflix tells another story. With services from Netflix and Hulu, along with the high quality that can be gained from an antenna, customers are finding fewer reasons to spend $100/month for television service.
Are you on the cutting edge of cutting the cable? Or do you think pay TV and internet sources will coexist in the long run?
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