Americans Drop Pay TV: Response to Weak Economy and Internet Competition
By Karla Robinson
August 6, 2012
August 6, 2012
- Top pay TV providers are facing fierce competition from evolving Internet services. In addition, the companies are dealing with harsh realities of a weak U.S. economy as well as battles with program makers, all contributing to over 400,000 American homes canceling their pay TV service since January.
- While the second quarter is generally weak for the business — with college students moving out and people changing houses before summer — top providers are reporting some noteworthy drops in subscriptions.
- DirecTV had 52,000 homes cancel their services, Time Warner Cable saw 169,000 customers cord-cut, Comcast lost 176,000 subscriptions, and Dish Network saw 10,000 customers leave. For Dish and Comcast, the rate of losses were actually less than previous quarters, but the losses were a first ever for DirecTV.
- The declining numbers are “ominous” for pay TV services, suggest Reuters. Competing with new services has led pay TV distributors to try new measures.
- “The maturity of the nearly fifty-year-old cable TV market has raised the stakes leading to more bitter and prolonged battles between distributors and their program maker partners,” notes Reuters. “These disputes now typically end up with customers losing some of their favorite programming for days on end and adds to customer weariness with pay TV.”
- “The idea of cord-cutting has gathered steam as several major technology companies [Google, Intel, Amazon and others] have held talks with program makers about putting together TV packages that will be delivered via the Internet,” the article states.
- But some don’t think cord-cutting is the primary issue. “We actually think a bigger issue in the market is that there is a group of customers that are in really serious financial shape, they have been out of work for a long time,” said TWC CEO Glenn Britt.
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