Cord-Cutting: Record Numbers in Cancelled Pay TV Subscriptions

By Dennis Kuba
August 12, 2011

The six largest cable and satellite TV providers lost 580,000 customers in the second quarter. This marks the largest such decline in U.S. history.
The number of pay TV subscribers has declined in three of the past five quarters.
“Rising prices for pay TV, coupled with growing availability of lower-cost alternatives, add to a toxic mix at a time when disposable income isn’t growing,” explains Sanford C. Bernstein analyst Craig Moffett. “For younger demographics, where in many cohorts unemployment is north of 30 percent, and especially for those with limited or no interest in sports, the pay TV equation is almost inarguably getting less attractive.”
Netflix and Hulu provide lower cost options. Competition from AT&T and Verizon is also having an effect.
Providers are struggling to deal with the trend. Dish, for example, is re-positioning itself away from lower income customers. Instead, the company plans to focus on more expensive offerings to increase average revenue per user.

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