Viewers pull plug on US cable television

[alienlovechild 75]

The number of people subscribing to US cable television services has suffered its biggest decline in 30 years as younger, tech-savvy viewers lead an exodus to web-based operations, such as Hulu and Netflix.

The total number of subscribers to TV services provided by cable, satellite and telco operators fell by 119,000 in the third quarter, compared with a gain of 346,000 in the third quarter of 2009, according to SNL Kagan, a research company.

Although television services offered by telecoms and satellite providers added subscribers over the period, cable operators were hard hit, with subscriber numbers falling by 741,000 – the largest decline in 30 years.

The figures suggest that “cord-cutting” – one of the pay-television industry’s biggest fears – is becoming a reality as viewers drift to web-based platforms.

Online TV services are stepping up their efforts to reach new viewers and become profitable: Hulu, which is owned by News Corp, Walt Disney and NBC Universal, has slashed the cost of its online subscription service by 20 per cent to $7.99 per month and offers a vast array of film and TV programming.

Jason Kilar, Hulu’s chief executive, has maintained that Hulu, which is exploring an initial public offering, complements pay-television services.

Yet the data suggest that the growth of Hulu and Netflix, the DVD subscription company which began testing a $7.99 per month streaming-only service last month, has become problematic for cable operators.

Ian Olgeirson, senior analyst at SNL Kagan, said it was becoming “increasingly difficult” to dismiss the impact of web-based services on the pay-TV industry, “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”.

Hulu’s revenues are increasing sharply: the company is projected to generate more than $240m in 2010, up from $108m in 2009. It has extended the number of devices that can access its subscription service to include Sony’s PlayStation 3 console and will add internet-connected devices, including Vizio, LG Electronics and Panasonic Blu-ray players, in the next few months.

Devices such as Apple’s iPad also appear to be accelerating the move away from traditional multichannel television.

Research from The Diffusion Group, a technology research company, found that more than a third of iPad users were likely to cancel their pay-TV subscriptions in the next six months.

The cable industry has launched a vigorous defence against cord-cutting: companies such as Comcast, which has agreed to buy NBC Universal, are backing “TV Everywhere”, which gives subscribers access to channels and programming online, and via their cable box.

http://www.ft.com/cms/s/0/a3986a1c-f28c-11df-a2f3-00144feab49a.html#axzz15dtco1Hm

[SuperDuper! 230]

Thanks for the great article. We just started the "cord cutting" process by getting an appleTV device. Yes, the writing is on the wall for Big Cable and Satellite. They better start offering "Ala Carte" options of channel packages to stop the fleeing of customers. I do like my landline, DVR and many channels from cable, so won't be cord cutting any time soon, but let the competition and free market forces now challenge cable and satellite. Wala, they no longer have a monopoly on TV content distribution, hooray!

[Marilyn. 340]

I cut the Cable TV cord a few years back... I was tired of paying almost 50 bucks a month for it.. we watch most of our shows through hulu or netflix... don't really miss cable TV that much and we still get quite a few channels on our TV...

oh and we just hook up our netbook with a HDMI cable to our TV to watch shows from Hulu or Netflix..

Edited November 18, 2010 by Marilyn.

[one...two...tree 2,762]

I discovered last night while looking for live score updates for an NBA game, that ESPN's website features certain games/sports events that can be watched live and the quality is good. I was able to watch the Suns vs. Miami last night. They still had commercials, which is fine by me. The future is happening now.

[Fandango 1,440]

We cut the cord ages ago....I can't see spending $70 a month to watch stuff I can get off the net, or having 1000 channels of ####### with weekly reruns.

[trillium13 84]

Maybe if the cable companies offered channels that people actually want to watch, without charging them an arm and a leg for said ####### channels, they might do a little better.

We have antenna TV. If we really want to watch something we watch it online, or via Netflix.

Do I really need 5 Spanish channels, 6 Christian channels, and 4 shopping channels, with no local channels of course, for 50 bucks or more a month? I don't think so.

[scandal 951]

I discovered last night while looking for live score updates for an NBA game, that ESPN's website features certain games/sports events that can be watched live and the quality is good. I was able to watch the Suns vs. Miami last night. They still had commercials, which is fine by me. The future is happening now.

Thanks Steve. I'll look into that. The only reason I still have cable (I use ATT Uverse) is for football - specifically Monday Night Football (and Thursdays at this point in the season) that are on ESPN. Sunday games are all on local Fox/CBS/NBC, and the only other TV I really care about is carried on local channels too which I can get HD over the air. So ... if ESPN online will give me live football games, I will consider kissing my cable goodbye.

[Fandango 1,440]

ESPN in my area offers free viewing of certain games for customers of certain ISPs here. Our house here is good...Scott's old apt was on the no-show list, lol