The six largest publicly traded U.S. cable and satellite-TV providers combined to lose about 580,000 customers in the second quarter
, the largest loss on record. While AT&T and Verizon still managed to add TV subscribers (202k and 184k respectively) thanks to new marketing efforts in recently-upgraded markets, eight of the nine largest subscription-TV providers in the U.S. lost a collective 195,700 subscribers according to Associated Press analysis
. While cable TV operators losing basic cable subscribers is a trend that has been going on for a while, satellite TV and telcoTV have still managed to add subscribers. That changed this quarter with Dish and DirecTV losing customers for the first time -- to the tune of 109,000 combined.
Traditionally executives have blamed this admitted trickle of defections on a sour economy and an awful housing market, insisting that "cord cutters" (or users who cut cable TV for Internet video) are fantastical creatures -- akin to unicorns, chupacabra, and yeti. But as operators continue to impose bi-annual rate hikes on struggling families, even those who've traditionally denied Internet video's impact appear to be softening their positions on whether Internet video is having an impact on the TV market.
Cable industry stock fluffer and Sanford Bernstein analyst Craig Moffett has led the charge in denying Internet video's impact on cable TV, first insisting the phenomenon wasn't real, then more recently stating that cord cutters were simply irrelevant 40 year olds living with their moms eating the video-equivalent of low-grade dog food
. More recently however he's stated that constant cable rate hikes aren't sustainable
, and now appears to be finally acknowledging Internet video is a viable lure to many
if the cable industry persists on pushing their luck:
“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. 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.”
In the course of a year or two, Moffett has gone from insisting that cord cutters were an urban myth
, to admitting there's a "perfect storm" brewing where rate-hike-weary users will be looking for cheaper options. One thing that Moffett has been right about (mostly thanks to wishful thinking) is the fact that as these losses grow, ISPs are going to start pushing harder on metering broadband (low caps, high per byte overages) in order to deliver investors the kind of growth they're used to. These price hikes
aren't tied to any real cost of delivering service, but will simply be imposed to both cash in on -- and impede -- Internet video's growth.