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Moffett: TV Cord Cutters 'Poor' & Eating 'Dog's Breakfast'
First cord cutters didn't exist. Now they exist, they just don't matter?
by Karl Bode 11:01AM Thursday Oct 28 2010
Sanford Bernstein analyst Craig Moffett is an easy quote machine for telecom journalists looking for quick sound bites, his name popping up about fifty times a week across various outlets. Occasionally, Moffett can single-handedly send company stocks tumbling, like he did recently when he argued that AT&T and Verizon wouldn't handle the recession. As a stock jock he's looking at things with an eye for immediate returns, so he's been particularly hard on Verizon FiOS, and network upgrades in general.

Not discussed is that Moffett's insight is shaped in part by the direction Sanford Bernstein would like stocks to head, and not necessarily reality. In Verizon's case, FiOS investment is not only helping them weather the recession, it has put them in the position to be competitive for the next decade. Moffett's also been helping cable stocks by continually poo-pooing the idea that some cable customers are cutting the cord, despite two consecutive quarters now of small but statistically relevant cable TV subscriber losses.

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As Comcast did yesterday in magically explaining away the 278,000 TV customers lost during the third quarter, the cable industry's new tactic with this phenomenon is to pretend that because these customers cut the cord due to cost and not say -- Netflix streaming -- they're not actually real. Moffett carries the cable sector's water via the New York Times, where he argues these losses are no big deal because these are "poor" customers who apparently enjoy dog food:
Mr. Moffett said the image of the cord-cutter had been that of a "cutting-edge technologist" who preferred to bypass cable to watch programming on computers and on an ever-proliferating array of devices. "The reality is it's someone who's 40 years old and poor and settling for a dog's breakfast of Netflix and short-form video."
In other words, first Moffett and the cable industry claimed cord cutters didn't exist, now that evidence is emerging showing they actually do, they're arguing these customers don't matter because they're dropping TV service due to high prices -- not Internet video. Why the denial? As we noted yesterday, the cable industry's hubris has them willfully ignoring the trend so cable stocks don't shiver at the truth: CableTV is over-priced, the current broadcaster/cable company rate hike dance of death is not sustainable, customers are starting to leave, and this is all before Internet video truly takes root.

Update: Another clear cable industry plan is to argue that because customers are cutting TV service but not Internet access (true), you can't call them TV cord cutters, which is an additional layer of semantic nonsense you can expect to see rattling around in this discussion as additional cable operators report earnings over the next few weeks.

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