Broadband

by Karl Bode


Filed Under:
cable, cord cutting, internet, tv



Yet Another Report Says The Rate Of TV Cord Cutting Is Worse Than Anybody Thought

from the not-just-a-river-in-Egypt dept

For years the traditional cable and broadcast industry has gone to comedic lengths to deny that cord cutting (getting rid of traditional cable TV) is real. First, we were told repeatedly that the phenomenon wasn't happening at all. Next, the industry acknowledged that sure -- a handful of people were ditching cable, but it didn't matter because the people doing so were losers living in their mom's basement. Then, we were told that cord cutting was real, but was only a minor phenomenon that would go away once Millennials started procreating.

Of course none of these talking points were true, but they helped cement a common belief among older cable and broadcast executives that the transformative shift to streaming video could be easily solved by doubling down on bad ideas. More price increases, more advertisements stuffed into each minute, more hubris, and more denial. Intentional blindness to justify the milking of a dying cash cow -- instead of adapting.

But we're slowly but surely reaching the point where the rise of the streaming video revolution can't be denied, with data indicating it's worse than anybody thought. While the pay TV sector lost another 1 million subscribers last quarter, those totals don't factor in those that bought a new home or rented a new apartment, but chose not to sign up for cable. Many of these folks are dubbed "cord nevers," having never bought into the value proposition of paying $130 more per month for a bloated bundle of largely-unwatched reality TV channels from a company that treats paying customers with disdain.

Meanwhile, a new report by eMarketer this week indicates that the pace of customer defections is notably higher than most previous estimates. The firm notes that it was forced to reduce its estimate for US TV ad spending due to faster-than-expected growth in cord-cutting:

"eMarketer expected a slowdown this year in TV ad sales, after 2016 benefited from both the Olympics and US presidential election,” said Monica Peart, eMarketer’s senior forecasting director. “However, traditional TV advertising is slowing even more than expected, as viewers switch their time and attention to the growing list of live streaming and over-the-top [OTT] platforms.”

All told, the firm predicts that by the end of this year, there will be 22.2 million consumers over the age of eighteen that have cut the cord, up 33.2% since 2016. And while there's still a whopping 196.3 million US adults that subscribe to traditional pay TV (cable, satellite, or telco), that tally is down 2.4% over 2016 levels, with the defection rate only accelerating. The cause? A strange idea known as competition and, by proxy, lower prices:

"The acceleration of cord-cutting is the result of several factors,” said eMarketer principal analyst Paul Verna. “First, traditional pay TV operators are increasingly developing streaming platforms, such as Dish Network’s Sling TV. Second, networks such as HBO and ESPN have launched standalone subscription services that allow users to tap those channels without a cable subscription. And third, digital players like Hulu and YouTube are now delivering live TV channels over the internet at reasonable prices—including sports properties that were previously available only through traditional distribution.”

As we've long noted, it wouldn't be particularly hard to nip this entire revolution in the bud. Entrenched cable providers simply have to shore up their abysmal customer service and lower rates for legacy TV. And while a few cable and broadcast executives are finally starting to get it, most would rather double down on lip service, bad ideas and price hikes in the false belief they get to nurse the dying cable cash cow in perpetuity.


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  • identicon
    Joel Coehoorn, 18 Sep 2017 @ 6:39am

    Point of View

    > "The rate of TV cord cutting is worse than anybody thought."

    Worse... or better?

    reply to this | link to this | view in chronology ]

  • icon
    Roger Strong (profile), 18 Sep 2017 @ 7:05am

    I think the content creators deserve credit for trying to save cable. Their exclusivity deals are removing the advantages of streaming.

    If there are five shows you'd want to watch regularly, you have to pay for five different streaming services.

    (Plus the streaming service that came with you cell phone contract, which shut down immediately after but which you're still paying for.)

    reply to this | link to this | view in chronology ]

    • icon
      crade (profile), 18 Sep 2017 @ 7:22am

      Re:

      Saving 100$ a month or so makes it pretty enticing to be a little bit less picky about what you watch.

      reply to this | link to this | view in chronology ]

    • icon
      OA (profile), 18 Sep 2017 @ 7:48am

      Re:

      The whole industry may wind up overestimating the addictive power of their product. People may just choose to watch less and less. Its already been happening.

      reply to this | link to this | view in chronology ]

    • identicon
      Michael, 18 Sep 2017 @ 8:03am

      Re:

      5 streaming services is STILL less expensive that traditional cable.

      Streaming services allow you to shut off the service in the months you do not want it (off-season of the show you want) and turn it back on without some crazy $100 reconnection fee. You also don't have to content with a 17 year contract or whatever Comcast is forcing on people.

      It would be simple for Comcast to compete on price, convenience, and service. They just don't. Their executives are focused on the next fiscal quarter and their bonus, not the health of the company long-term.

      reply to this | link to this | view in chronology ]

      • icon
        Roger Strong (profile), 18 Sep 2017 @ 9:02am

        Re: Re:

        I just attempted to check the streaming price and availability of my particular five shows here in Canada.

        Realistically, only two are available for streaming; one for $7.99/month, and one for $79/year. And I'd disqualify one of those, because the show will only stream some time beyond its original release. From experience, that could mean five years later. The other service has a yearly contract.

        The other shows are only available as "If you pay $130/month for cable with premium channels, then you may stream them."

        But say all the shows were available for $8/month plus taxes each. And yes, they're each on a separate service. You're still looking at $50 month, at least a couple contracts, and five separate monthly bill payments. And you won't watch a couple of those services, because you'll STILL be pirating the shows to see them when they're released.

        reply to this | link to this | view in chronology ]

    • identicon
      me, 18 Sep 2017 @ 8:32am

      Re: If the content didnt suck

      People wouldn't be seeking an alternative. Same is easily said of the Movie Industry. It's not piracy, its shitty content.

      reply to this | link to this | view in chronology ]

    • identicon
      Joel Coehoorn, 18 Sep 2017 @ 2:44pm

      Re:

      Or you can binge one at a time. Why pay for all five at once, when what you really want to do is watch as many episodes that you can of one, so you can keep the whole story together. When you do this, you don't have time for others.

      So you keep one service for a while, and when you've caught up on what you care about (or maybe not all caught up, but caught up as far as the most recent season that is entirely available), you drop that service and switch to another.

      So maybe you have a couple general services that are worth keeping all time (like Netflix for the kids), and others you swap in and out depending on the time of year.

      In other words, don't pay for more than two or three at any one time, and you still get access to everything you want, when you really want it.

      reply to this | link to this | view in chronology ]

      • icon
        Roger Strong (profile), 18 Sep 2017 @ 8:11pm

        Re: Re:

        Or you can binge one at a time.

        Some of the shows on my list, like Last Week Tonight and Samantha Bee, deal with current events. Watching them six months later ruins much of the enjoyment.

        Anything with a fan base - like Star Trek: Discovery - is going to have a lot of discussion online. Much of it unavoidable. Watching it six months means you not only can't take part in the discussion, but plot points have already unavoidably been spoiled.

        And some shows I just plain want to watch as they come out.

        reply to this | link to this | view in chronology ]

        • icon
          PaulT (profile), 20 Sep 2017 @ 12:29am

          Re: Re: Re:

          "Some of the shows on my list"

          "And some shows I just plain want to watch as they come out."

          On *your* list. That *you* want.

          Why do you believe a majority of people share your tastes and requirements, and why do you think that everyone will have the same disparity of network availability that you expect in your region?

          I don't think anyone's saying that you're wrong, it's just that your preference to subscribe to a large number of services every month to access every program you want is not necessarily what most other people will be willing to do. Most just will do without some shows, or swap and change their subscriptions according to show release.

          reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 6 Oct 2017 @ 7:37am

          Re: Re: Re:

          > Anything with a fan base - like Star Trek: Discovery - is going to have a lot of discussion online.

          And with the current trends, as more people wait until they can binge a season at a time, the timing of those conversations will also shift. You wouldn't necessarily have to give that up.

          Or, you might just have to pick which ones you care enough about to be able to keep current. Game of Thrones seems to be one people want to watch right away, so maybe you keep the HBO subscription while the entire season runs... but while that's happening, you can drop something else, and then when the season ends, why keep it up the rest of the year?

          This is the future... swapping packages in and out based on how much you want to pay and who is able to produce content you want to watch. And it's doubtful many people will be spending $100+ per month on the cable package. Most will find a way to get by for about half of that, even if it means giving up some things.

          reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 20 Sep 2017 @ 12:22am

      Re:

      You're making the same mistake regularly made by the cable companies during their denial period - both assuming that people have to subscribe to all services at once, and assuming that people will never simply do without when doing so is cheap.

      If they can still save half their monthly bill by going without 2 of the shows they want, many will do so and maybe catch up later. Plus, the people genuinely in the situation you describe are probably the outliers that cable companies pretended that cutters were.

      reply to this | link to this | view in chronology ]

  • icon
    Groaker (profile), 18 Sep 2017 @ 7:11am

    New charges

    Unfortunately we are playing whack-a-mole, and the ever so imaginative cable industry can dream up new charges and scams faster than the populace can identify and work around them.

    That is no excuse for failing to participate in the game. The new wrinkle of course, is that the "cut the cord" industry is acting more and more like the cable industry. Even to the point of reusing tired and bedraggled content from the Cable Industry.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Sep 2017 @ 11:08am

      Re: New charges

      What is this "Cut the Cord Industry" of which you speak? There is a whole industry that revolves around people "cutting the Cord"? How does that work and is it sustainable?

      I doubt this is a zero sum game as there are many who recently are finding it difficult to put food on the table and what is the first expense to be gotten rid of?

      reply to this | link to this | view in chronology ]

  • icon
    DannyB (profile), 18 Sep 2017 @ 7:23am

    It's not WORSE than anybody thought

    Cord Cutting is BETTER than anybody thought.

    (I've mentioned before.)

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Sep 2017 @ 7:25am

    "New home"

    those totals don't factor in those that bought a new home or rented a new apartment, but chose not to sign up for cable

    How can they tell the difference between those people and people who said they were moving so they'd be allowed to cancel?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Sep 2017 @ 8:28am

      Re: "New home"

      Then they're counted as a lost subscriber, because there's been a loss without a corresponding re-sign.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 18 Sep 2017 @ 10:09am

        Re: Re: "New home"

        there's been a loss without a corresponding re-sign

        Isn't that exactly what they said wasn't being counted as a lost subscriber?

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Sep 2017 @ 11:12am

      Re: "New home"

      Allowed to cancel - lol. What a business model ... demand a multiyear contract because you know ahead of time that your service sucks and the customers will want to cancel, then jack up the rates and still attempt to enforce the early termination clause of the original contract that you just broke - lol. And then they go crying to congress about how those mean consumers are being mean 'n stuff.

      reply to this | link to this | view in chronology ]

  • icon
    NeghVar (profile), 18 Sep 2017 @ 7:29am

    One big problem

    With what Disney has announced at the end of the year, streaming services and their content may become so fragmented that it is no longer cost effective to get what you want. All Disney, Marvel and Star Wars content will be pulled from Netflix, Hulu, and Amazon Prime so that Disney can start their own streaming service.
    So what if A&E, Viacom, TBS, Discovery, etc. each start their own? Each with their own monthly fee. The cord-cutting may no longer be practical.

    reply to this | link to this | view in chronology ]

    • icon
      Anonymous Anonymous Coward (profile), 18 Sep 2017 @ 7:48am

      Re: One big problem

      In that process they may actually learn the true value of their content. The success of fragmented silo's providing their own content remains to be seen.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 18 Sep 2017 @ 11:19am

        Re: Re: One big problem

        Maybe - will they recognize it for what it is or blame piracy again for their failed efforts?

        reply to this | link to this | view in chronology ]

        • icon
          Anonymous Anonymous Coward (profile), 18 Sep 2017 @ 12:01pm

          Re: Re: Re: One big problem

          Maybe. But it is one of those things that shows that get talked about get viewers. Those that don't get talked about don't get viewers. If there is no 'piracy', then it is likely that no one is talking about their shows. So, they are damned (in their eyes) if there is 'piracy', and damned if there is no 'piracy'.

          reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 18 Sep 2017 @ 7:30pm

          Re: Re: Re: One big problem

          Simple, blame the booogie man, them damn nasty thieving pirates who need the book thrown at them and the laws changed so we, the legacy gatekeepers control the internet.
          Then it is mission accomplished.

          reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Sep 2017 @ 7:52am

      Re: One big problem

      Alternatively that will drive even more people to switch to self published content on YouTube, vimeo et. al.

      reply to this | link to this | view in chronology ]

      • identicon
        Richard Hershberger, 18 Sep 2017 @ 8:01am

        Re: Re: One big problem

        My grade-school age kids are largely indifferent to traditional scripted narrative programs. They watch YouTube videos to the extent I will allow. Talking to other parents, this seems to be pretty common. I think the television industry is in for a shock as this generation grows up.

        reply to this | link to this | view in chronology ]

        • icon
          R.H. (profile), 18 Sep 2017 @ 10:04am

          Re: Re: Re: One big problem

          I'm 32 and with the exception of a few scripted shows that I specifically use streaming services to watch, YouTube has been providing my passive video entertainment since I ditched cable a few months ago. I've noticed that many younger people do the same thing. You're right, there'll be a big shock in about 5-10 years when the first post-millennial generation grows up and doesn't even consider cable.

          reply to this | link to this | view in chronology ]

          • icon
            Improbus (profile), 18 Sep 2017 @ 10:32am

            Re: Re: Re: Re: One big problem

            I'm 52 and I was cutting the cord before it was cool. Bad Cable. Much Expensive. No WOW.

            reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 18 Sep 2017 @ 10:49am

            Re: Re: Re: Re: One big problem

            I imagine there'll be a non-zero number that make to 18, get their own apartment, and the apartment manager starts talking about cable packages available, and their faces go to dumbfounded confusion "What's cable? Oh, you mean the internet?". And then when they get to the prices "Why the fuck would anyone sign up for something so expensive??!!".

            reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Sep 2017 @ 7:54am

      Re: One big problem

      I'll just be cutting more cords.
      If (probably: when) streaming gets too fractured to be worth the money, I'm just going to stop watching. I'm already "missing" several shows and movies that people around me seem to be into due to time constraints, yet I'm not getting the feeling I'm actually -missing- anything.
      I need to catch up on my book-list anyway.

      reply to this | link to this | view in chronology ]

    • icon
      Grey (profile), 18 Sep 2017 @ 8:15am

      Re: One big problem

      Not really a problem at all.

      Just a modicum of self control, and you subscribe to one or two things, watch what you wanted, then quit. You don't really have to subscribe to EVERYTHING at once.

      Some people react less optimally to boredom, that's fine too. Go outside and play. Visit a museum, donate blood, If you've got mobility issues like me, use the time for PT.

      When the media companies inevitably play games and offer only a few episodes at a time, use the savings to buy the entire season on Blu-Ray or download.

      reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 20 Sep 2017 @ 12:34am

      Re: One big problem

      "All Disney, Marvel and Star Wars content will be pulled from Netflix"

      If I'm not mistaken, it was only Disney content (Marvel and Star Wars would continue), and only for new releases after the stated date (they wouldn't suddenly pull every title from the platform). Many outlets backtracked on the scary headlines when they found out the content of the deal, I believe.

      "So what if A&E, Viacom, TBS, Discovery, etc. each start their own? Each with their own monthly fee. The cord-cutting may no longer be practical."

      Only if you assume that everyone will pay for all of those. In reality, half the people paying for those on cable never watch them and so would never pay for them separately, while a majority of potential customers will not be able to afford to pay for everything and pay for a competitor instead. You literally have to be a company with the size, catalogue and brand recognition as a Disney or HBO for this sort of thing to work.

      reply to this | link to this | view in chronology ]

  • icon
    OA (profile), 18 Sep 2017 @ 7:35am

    You're worse than anybody thought!....

    But seriously. Not everybody gets the opportunity to be forced to do whats in their best interest. They should take it.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Sep 2017 @ 7:48am

    Would you please stop using loaded terms like better or worse to describe higher or lower rates?

    reply to this | link to this | view in chronology ]

  • icon
    Grey (profile), 18 Sep 2017 @ 7:55am

    Cutting the Cord on Wednesday!

    Took a few years to get my mother in law trained, but it's Happening! We're cutting the Comcast line on the 20th, Centurylink Gig service finally in my area. (From a friend with their 'net... "The Customer service sucks, but the connection is great!" )

    Our bill is now going from nearly $300 , to $85 + fees and whatever we subscribe to on a month by month basis. (Kids mostly watch Japanese language shows, and the only thing I'll have to find elsewhere is "Rick and Morty".

    All because Comcast tried to bump the broadcast TV Fee, and refused to remove ESPN. Those few measly dollars pushed the rest of the family over the edge.

    One straw too many for the camel's back. Thank you Comcast. Goodbye!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Sep 2017 @ 8:25am

    One day, I hope to tell stories to my grandkids about cable TV, VHS tapes, and that the icon for the "save" function actually represents a real object.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Sep 2017 @ 9:15am

    While there may be some fascination with these services on their startup for the first month, they just don't have any long term viability and many people will just download a torrent or a cloud service because who wants to subscribe to 20 different services to get one show you like on each of the services? That's what these networks don't understand.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Sep 2017 @ 9:19am

    I'd play them a song on my smallest violin but they'd probably set the RIAA on me...

    reply to this | link to this | view in chronology ]

  • identicon
    SirWired, 18 Sep 2017 @ 9:28am

    Of course, the cable execs know exactly what the rate is

    Of course, cable industry executives know EXACTLY what the rate of cord-cutting is; they know how many housing units their infrastructure services, how many are signed up for service, etc.

    I think it's not that "the rate is higher than anybody thought", it's that the people that know the exact answer have no interest in making those (horrible) numbers public.

    Really, it's just an "inside-baseball" statistic; advertisers buy ad time based on (projected) viewership, not on how many people can theoretically watch something. One would assume content providers selling their channels DO get the exact information (so they know what to pay/bill), but are under an NDA not to share it.

    The one group that really needs to know this is investors, but they are not in a strong position to demand it.

    reply to this | link to this | view in chronology ]

  • identicon
    Personanongrata, 18 Sep 2017 @ 2:16pm

    Cord Cutters Delight

    There are a great many streaming options that offer livetv (including local channels) plus on-demand movies at half of the cost of cable:

    PlayStation Vue

    https://www.playstation.com/en-us/network/vue/

    CenturyLink Stream

    https://www.centurylinkstream.com/how-to-watch.php

    Hulu

    https://www.hulu.com/live-tv

    DIRECTV NOW

    https://www.directvnow.com/

    Sling TV

    https://www.sling.com/

    If anyone knows of any other livetv streaming and movie on-demand services please post them.

    reply to this | link to this | view in chronology ]

  • identicon
    Personanongrata, 18 Sep 2017 @ 2:28pm

    One Device to Stream Them All!

    You don't even need to pay for a subscription to a service simply purchase a Roku for a one time flat fee connect it to the intertubes and you never have to pay for TV or movies again.

    https://www.roku.com/index

    You can simply use the Roku channel PlutoTV and watch all the shows/movies you can handle free (except for your intertube connection). There are hundreds of other free viewing options to choose from. Yes you have to watch commercials with the free viewing but the service is more than worth this minor inconvenience.

    https://channelstore.roku.com/details/74519/pluto-tv

    I have no financial stake in any of this.

    reply to this | link to this | view in chronology ]

  • icon
    ThatDevilTech (profile), 19 Sep 2017 @ 7:48am

    What sucks....

    Is the overage cap bs. Because of that, we went back to DirectTV to get the no cap AT&T Internet. They're still padding their numbers by using the caps to keep/reel in subscribers to cable/internet bundles. We hardly watch tv. My wife watches the shows on ID primarily. The kids play PS4 or watch Netflix/Youtube constantly. I play the PS4 a good bit as well.

    What we do watch, we don't tend to watch live. We'll catch up using Kodi. So, while we're a DTV subscriber, it's primarily for the no caps on the Internet. When we had cable internet alone it started with no caps but they instituted caps and we went from paying $60/month to over $100/month with the overage fees.

    What we have now has a slower overall speed than what we had with cable internet, but we have no caps so it balances out. We got a good deal on the bundle that we're paying about what we paid for Internet prior to caps (about $75/month) now. So it's a cat and mouse game with these reports.

    What really needs to happen is the undbundling of content/Internet providers. That will level the playing field more. That and the caps get stopped. But we know that's not going to happen, it makes too much money for the ISP's.

    reply to this | link to this | view in chronology ]

  • icon
    Steve Janz (profile), 2 Nov 2017 @ 4:34pm

    Thanks for the great discussion on cutting the cord. Selecting what you want to watch with Paid TV vs. OTA TV service is definitely something to consider before fully cutting the cord. If you do decide to cut it, spend the money on a good OTA antenna and have a pro install and calibrate it for you. We actually have a few other tips in one of our recent blog posts for some further ideas to help you out on this topic: https://www.technospeakco.com/ota-paid-tv-signals-not/

    reply to this | link to this | view in chronology ]


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