Maybe bi-annual rate hikes during recession wasn't such a good idea...
As we noted this morning
, Comcast lost 275,000 video subscribers during the third quarter. It's further evidence of the more statistically relevant TV cord cutting trend we began to see last quarter, when cable providers collectively lost 711,000 subscribers, and six out of the top ten cable operators saw their biggest subscriber drop ever. Why? High cable prices and bi-annual rate hikes during a recession
. Comcast's 275k lost subscribers was higher than Wall Street analysts estimated, forcing Comcast to try and argue that people dropping cable due to cost aren't cord cutters
Comcast lost 275,000 cable subscribers last quarter, and has lost 622,000 in the first 9 months of 2010. More evidence of "cord cutting"? Nope, says the cable giant. It's evidence that the economy sucks. That's the short version of the company's explanation for the drop during its earnings call this morning: It had a variety of reasons to explain the exodus of subscribers, but all of them revolved around money that their previous customers don't have or don't want to part with.
Of course whether a customer is cutting the cord due to cost, HD Netflix streaming via an Xbox 360, a move to Gleise 581g or a newfound love of books -- they're still a TV cord cutter
. The cable industry seems determined to ignore that any cord cutting trend is taking root (however small), because they'd then have to admit the truth: the current cable TV price hike party is over. The endless parade of rate hikes for bundles of unwatched channels is not sustainable
in the age of broadband.
If cable operators are seeing these kinds of losses now, what happens as more viable and inexpensive living room broadband TV options emerge? Price hikes are easy to accomplish when "competition" consists of a wink and a nod between cable/phone/satellite executives when it's time raise rates in unison. Gouging your customers becomes a lot more difficult in the face of disruptive Internet a la carte alternatives, wherever they originate.