Column: Where Are Cord-Cutters? Signing Up for Cable, Satellite

Mar 1, 2009  •  Post A Comment

Evidently, the revolution hasn’t started yet. My army of cord-cutters has yet to march up and stand by my side. According to industry analyst Craig Moffett, they’re actually going the other way, back to the multichannel mothership.
In a recent report, the Bernstein Research analyst said cable, telco and satellite TV companies reporting their fourth-quarter results collectively added 441,000 subscribers during that period, up from the 396,000 subscribers added in the year-ago quarter.
So you’re telling me that, in the face of the worst economy in decades, people are shelling out more money for something they can get for free online?
Indeed. Mr. Moffett says cord-cutting “remains the province of urban myth.”
I’ll concede the numbers support his position. But let’s take a closer look at who’s gaining.
Here’s his breakdown:
AT&T +264,000
Verizon +303,000
DirecTV +301,000
Comcast -233,000
Time Warner Cable -119,000
Charter -75,000
What we have are consumers leaving cable and turning to satellite and telcos. Satellite companies have always campaigned harder on the value proposition and most offer better overall pricing than cable companies. As for the telcos, well, I got a flyer from one of them last week offering to pay me to sign up for its video services. (On a side note, telcos are suffering severe land-line losses as consumers ditch their wired phones, while cablers are picking up a fair amount of new voice customers.)
My point, though, is that price sensitivity is alive and well when it comes to video. Does that mean job losses in the fourth quarter drove up multichannel subscriptions?
Recent Nielsen data supports this couch-potato theory.
Nielsen said TV viewership clocked in at a record 151 hours per month in the fourth quarter, up from 140 hours in the third quarter. “[It’s] a jump that Nielsen doesn’t explain, but which I can only ascribe to the growing ranks of the unemployed spending more time in front of the tube,” said Will Richmond, analyst with VideoNuze.com, in his report on the subject.
The jump also may be due to the fall season. But it’s worth asking if the growing ranks of unemployed are the ones migrating from cable to satellite and telcos.
Mr. Richmond pointed out that Nielsen’s data supports the possibility of cord-cutting for the 18-to-34 demographic because that group watches five hours of video online per month compared with about 118 hours on traditional TV, the highest ratio of any age group.
Maybe it’s a good thing that online video’s not quite ready for primetime yet. After all, Hulu recently yanked its content from competitor TV.com and Web-to-TV software service Boxee at the request of content owners, a move that could set in a motion of flurry of rights battles over online video this year.
“All of this is part of something I call the coming online video backlash,” said James McQuivey, analyst with Forrester Research. “It’s going to take this whole year, and it’s going to inspire a lot of hasty moves on the part of TV executives to pull previously available content. And consumers are going to hate it.”
The first-quarter numbers from multichannel providers will be the real proof of the urban myth of cord-cutting. We were still living on borrowed time in the fall, distracted by an election, unsure of the depth of the recession. Now that the recession has dug its heels in, will more consumers move away from cable and satellite this quarter? And can the Web portals handle it if they do?
The last thing online video needs is a hating consumer.


  1. It would be interesting to know what percentage of those subscribers are on a “package”. Comcast offers a promotional price of $66.00 for Internet + basic cable whereas basic Internet is $52.95 / month (both are for a promotional 6 month period).
    The cable companies have a done a good job of making it look like they’re adding cable subscribers, but I’m guessing a good portion of people (not the majority though) will cut their Cable TV once that promotional period ends.

  2. I cut the cable cord last year and have gone with both Boxee in my home theater room and PlayOn streaming to my PS3 in the living room. I like both. Hulu’s attempt to stifle Boxee failed. PlayOn was never effected. Between PlayOn with TVersity and a PC MediaCenter in the other room with Boxee, who needs cable for 90% of content?

  3. I’ve been ‘cordless’ for awhile now — enjoying OTA in HD via Samsung converter box + amplified antenna + Vizio = amazing picture! Add to that a little Roxio/Netflix action and for the most part, it’s all pretty good. And whatever that doesn’t cover — I hit the web!

  4. Since Boxee had to cut the Hulu cord (was it the cable operators who complained?), I’m now back watching high-def via cable instead of the low-def jerky stuff the internet delivered to my big screen.

  5. I’d be interested to see the numbers of folks cutting the cable and dish and going for the over the air signal with a converter box, especially if they can get those uncompressed HD signals.
    I don’t get migrating from cable to telcos because you are just trading one bundle for another. And that will have to go up in price eventually too.
    I think online video provides some great alternatives, but the bottom line is overall folks want to watch the bulk of it on the bigger screen. Computer monitors, laptops and cell phones just don’t replace the experience, and the computer chair is hardly a lounger!
    Keep that cord-cutter banner flying though Daisy, because more online content does mean consumers can have more options in more places. Let’s not go backwards.

  6. I’ve cut the cord almost two years ago, and never looked back. I get all of my entertainment from the internet. And outside of UFC and WWE, it’s all web exclusive content, most in the form of podcast. I even rarely use Hulu and the other similiar services. Broadcast productions no longer interest me. I get more enjoyment from the web content than I ever did from broadcast tv.
    I’m hard pressed to even remember the last network programming I’ve watched. Broadcast TV has lost me as a viewer, and I’m not sure what would get me back. I considered getting cable for the HD programing, but if it’s not programming I want to watch what the point in the pretty picture if I’m not watching it. I’d much rather watch the HD content from Revision3, PixelCorps, or Meevio than NBC, ABC, CBS, or FOX.

  7. “I’d be interested to see the numbers of folks cutting the cable and dish and going for the over the air signal with a converter box, especially if they can get those uncompressed HD signals.”
    You can’t watch uncompressed HD with NTIA converter boxes. All they provide is standard definition video outputs (composite or baseband), whether the received signal is SD or HD.
    Samsung recently discontinued its 5th-gen ATSC set-top box (DTB-H260F) and that one did have HD outputs. At present, there aren’t any terrestrial digital TV set-tops available to consumers – only PC add-ons like USB stick tuners, or commercial AV tuners that cost quite a bit more $$.

  8. I’m stuck on stupid with DishTV HD service and premiums, though getting ready to run some OTA amplified antenna tests. However, I don’t know what the specs are of the built-in tuner on my Vizio TV, so it might be less than brain-spraying quality. 1080P is one powerful drug.

  9. I cut the cable cord when I transferred from DC to NY last year. I have no TV in my apartment, but I bought a HD USB stick for my iMac and watch some OTA HD with it. 90% of my viewing, however, is streaming from the internet. I used Boxee daily. Since Hulu pulled their Boxee access, I have not watched a show using Hulu once. There are other ways to get this content which are higher quality and free of commercials. Sorry, Hulu, but your move has cost you my eyeballs.

Your Comment

Email (will not be published)