Predictions

by Karl Bode


Filed Under:
cable tv, cord cutting, internet, tv



Survey: 5.4 Million Americans Will Cut The Cable TV Cord In 2018

from the inevitability dept

The rise of cord cutting shows no sign of slowing down. As cable providers continue to raise prices yet refuse to seriously address their dismal customer service, nasty billing fraud problems and skyrocketing prices, more users than ever are flocking to a new variety of cheaper, more flexible streaming alternatives. Some cablecos have attempted to get out ahead of this trend by offering their own competing services (AT&T's DirecTV Now, Dish Network's Sling TV), but most traditional cable providers seem intent on just doubling down on the same bad ideas that started the cord cutting trend in the first place.

The result is an obvious one. A new report indicates that more than 5.4 million cable TV subscribers are expected to cut the cord this year, resulting in a $5.5 billion loss in revenue for traditional cable TV providers like AT&T, Comcast, Charter and Verizon. That hit comes in comparison to the 4.8 million traditional pay TV subscribers lost in 2017, and the 3.8 million lost in 2016. It's all thanks to this mysterious thing known as competition:

"As the process of finding alternative paths to content gets easier and easier, people are acting on the frustrations they have with traditional providers and leaving,” the study’s lead author and cg42 managing partner Stephen Beck told MarketWatch."

Charts from the full study, which is stuck behind a $2,000 paywall, lays things out pretty clearly for companies like Comcast:

Remember of course, that this is a trend that cable and broadcaster execs spent years claiming either wasn't real, or didn't matter because things would auto-correct once Millennials started procreating. That incredible denial was in turn propped up by industry metric organizations like Nielsen, which were happy to tell industry executives precisely what they wanted to hear (that this was a trend that would be easily reversible without having to oh, actually do all that much). As the report notes, that head in the sand approach isn't really paying dividends:

"Accelerating the cord-cutting trend is a lack of brand loyalty borne out of frustration, said Beck. Survey respondents were asked to rank their top frustrations by pay-TV provider. Beck found customers were most frustrated with being unable to get what they considered competitive or “reasonable” rates, new customers getting better deals than existing ones and being “nickeled and dimed” with multiple fees and charges.

Based on the survey data and information from public filings, cg42 predicts Comcast will lose 7.2% of its 21.3 million subscribers in 2018, a potential financial loss of $1.6 billion for the company. The firm also predicts AT&T’s DirecTV will lose 4.8% of their 24 million customers and a potential $1.2 billion.

These days, most executives do tend to acknowledge the trend is real (it's pretty hard to ignore at this point), but they still aren't particularly keen on actually doing anything about it. They're stuck between a rock and a hard place: denying the trend is real and refusing to compete on price will simply accelerate defections. But buckling to demand, shoring up customer service, and offering less expensive, more flexible channel bundles will hurt revenues. That said, it still makes more sense to be ahead of a trend with a quality offering in the field, than playing catching up with streaming alternatives that have slowly built a solid brand following.

A big reason for this apathy among many industry giants is they know they have an ace in the hole: their monopoly over broadband. As TV revenues sag, providers are simply turning to price hikes, usage caps and overage fees (aka, even more arbitrary and unnecessary price hikes) in order to make cutting the cord and streaming as expensive as possible. And, thanks to napping regulators, the death of net neutrality, an apathetic, cash-compromised Congress, and a lack of real broadband competition in countless markets nationwide, not much is going to be done about it.


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  • icon
    Gary (profile), 23 Jul 2018 @ 6:55am

    Cord Cut

    Unfortunately my cable company is my ISP, and they simply raised my rates for internet to make up for all the money they lost when I dropped the TV portion...
    Sure, I'm still paying less but the explosive rate increases haven't slowed despite all the promises made before the merger. (TWC, now Spectrum)

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

    • icon
      rangda (profile), 23 Jul 2018 @ 7:18am

      Re: Cord Cut

      That is the clear end game for them. As it stands right now from my provider (FIOS) it's cheaper to get cable/broadband/phone than it is to get cable/broadband, so I have a home phone line whether I want it or not.

      They will just shift the prices around so that you get "free" phone and "free" cable tv with your broadband. Your bill isn't actually going to go down. That would require actual competition in the space which is something I won't see in my lifetime.

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

      • identicon
        Anonymous Coward, 23 Jul 2018 @ 8:22am

        Re: Re: Cord Cut

        I wonder ... would it be useful to have a watchdog organization watching over business in order to keep some form of sanity in place?

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

        • identicon
          Anonymous Coward, 23 Jul 2018 @ 8:42am

          Re: Re: Re: Cord Cut

          That how it done on this side of the pond so why can't it be done in the USA, where political appointees run the agency?

          /Rhetorical

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

        • icon
          Anonymous Anonymous Coward (profile), 23 Jul 2018 @ 8:54am

          Re: Re: Re: Cord Cut

          We have a couple, though neither are doing their jobs. Now we need a watchdog organization to watch over the watchdog organizations, who will eventually need a dog watcher watching over the watchdog watching watchdog organizations and hope they have enough treats already in their pockets so they won't also become compromised.

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

    • icon
      Anonymous Anonymous Coward (profile), 23 Jul 2018 @ 7:51am

      Re: Cord Cut

      I have a similar issue. Internet only is more expensive than Internet plus cable. So I buy the Internet plus cable plan and just don't hook up the cable box. Now, if I could only get them to support IPv6.

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

  • icon
    Totes McGoats (profile), 23 Jul 2018 @ 7:09am

    data caps will be how they attack cord cutting

    I have one of those Amazon TVs with the Fire TV built in – checked the data usage and just one TV – excluding my computer and other streaming devices – used 600GBs of data last month.

    If my internet provider did do data caps the kind of cord cutting I do would be impossible.

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

    • identicon
      I.T. Guy, 23 Jul 2018 @ 7:25am

      Re: data caps will be how they attack cord cutting

      I've decided that when they do that I will spend a majority of my time finding a way to hack into the network and get it for free. Illegally of course. No guilt felt.

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

  • identicon
    Anonymous Coward, 23 Jul 2018 @ 7:17am

    Corporations are people
    People sometimes are are insane
    Therefore, corporations are sometimes insane

    Is there a suicide watch program for corporations?

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

    • icon
      PaulT (profile), 23 Jul 2018 @ 7:54am

      Re:

      It's a long time since I've seen it, but I remember the documentary The Corporation being pretty good. As I recall, the conclusion is basically that if the average corporation was indeed a person, they would fit the clinical definition of a psychopath.

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

    • identicon
      Anonymous Coward, 23 Jul 2018 @ 9:57am

      Re:

      You cannot jail a corporation. If one cannot be held accountable for their actions they should also not be able to avail themselves of the services available to the rest of "personhood". You are either on the grid or off of it. Somehow corporations have been allowed to take advantage of some rights without being vulnerable to consequences.

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

      • identicon
        Anonymous Coward, 23 Jul 2018 @ 11:00am

        Re: Re:

        "You cannot jail a corporation."

        Because they are privileged and are not subject to authority.

        I think it is possible to revoke their incorporation, but has this ever been attempted or maybe been successful?

        Somehow? ... yeah - it's corruption

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

        • identicon
          Christenson, 23 Jul 2018 @ 11:49am

          Re: Re: Re:

          Well, you might want to read the lawsuit against Suburban Express (and nutcase owner Dennis Toeppen)... there, the Illinois AG wants to take away its license to do business....

          As I see it, the problem is that we don't have a good, gradual way of increasing collective responsibility along with the collective power that comes with being a corporation.

          A corporation should be somewhere between a private citizen and the government in terms of its rights. To illustrate, let's use the statement "tobacco is good for you"...coming from me as an individual, the government promises me freedom, as a corporation, I might get sued by the FTC, and as the government, well, I hope that gets me and my department secretary fired by public acclaim.

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

  • identicon
    Anonymous Coward, 23 Jul 2018 @ 8:25am

    I think this article (and most articles) on cord cutting, miss the big picture here. Given the rollback of net neutrality and fcc regulation, in general, cord cutting is going to be irrelevant. The internet is destined to become nothing but tv, so internet access will just be a fancy name for monopolized cable tv as it always was, except on a larger scale. The packaging will be different, but it will be the same shit.

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

    • identicon
      Anonymous Coward, 23 Jul 2018 @ 8:47am

      Re:

      "The packaging will be different, but it will be the same shit."

      It is definitely worse today, in that in the olden days they had to actually do some work in order to spy upon you.

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

      • icon
        afn29129 David (profile), 23 Jul 2018 @ 9:43am

        Re: Re:

        I threw my TV into the trash some 15 years ago and life is so much better without it.

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

        • identicon
          Anonymous Coward, 23 Jul 2018 @ 10:32am

          Re: Re: Re:

          I did it in 2002. I could not justify buying a tv because broadcasters went digital. Today I don't want a tv. I can not tell you how happy I am not to be bombarded by ads and commercials 24/7.

          Its been long enough now that if I go to someone else's house I want to turn their tv off just to stop the irritation of those ads.

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

    • identicon
      Christenson, 23 Jul 2018 @ 11:58am

      Re: Monopolized junk...

      Umm, the internet actually realizes the promise of hundreds of TV channels...here I am, hanging out on an essentially amateur "TV" show that only interests a few called "techdirt".

      Furthermore, the forces against the monopoly are already gathering in the wings...pay no attention to that man with the rockets and the 300 mile high internet satellites...or any of his competitors...or the people with pitchforks outside Ajit Paj's office.

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

  • This comment has been flagged by the community. Click here to show it
    identicon
    Sourav Maheshwari, 23 Jul 2018 @ 10:38am

    It's a long time since I've seen it.

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

  • identicon
    PRMan, 23 Jul 2018 @ 2:46pm

    Lack of competition?

    > a lack of real broadband competition in countless markets nationwide, not much is going to be done about it.

    This is where you are wrong. T-Mobile and Verizon are rolling out 5G right now and when they are done, they plan on offering HOME internet.

    It won't take much to out-compete the pathetic offerings that home ISPs are giving right now, especially with the rising prices.

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

    • identicon
      Thad, 23 Jul 2018 @ 3:26pm

      Re: Lack of competition?

      I'd love to see someone come in and compete with broadband Internet on cost and quality.

      However, given that a T-Mobile subscription costs roughly as much for LTE service as broadband does for 50Mbps, and has a much lower bandwidth cap, you'll excuse me if I don't get my hopes up.

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

  • icon
    MDT (profile), 23 Jul 2018 @ 2:52pm

    Cut the Cord Myself

    I was on DISH, and called up to switch my family over to the Hopper (we have 3 receivers, and are recording some shows 3 times for different rooms). They wanted me to pay them $300 for the 'privilege' of paying them $25 more per month for the one Hopper than the 3 receivers I already paid for.

    I got so mad, I got 3 Roku's, got everyone set up on them, and everyone in the family was happy enough with them. We cancelled the service, and when it came time to send the receivers back, they only sent us one box for one of the two HD receivers, they told us to keep the other receivers as they were 'obsolete'. Up until that month, they'd been charging me $15 a month for that 'obsolete' receiver.

    Ended up saving (even after upping my U-Verse to Unlimited for +$30/month) over $70 per month. And everyone is happy with the results.

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

    • icon
      That One Guy (profile), 23 Jul 2018 @ 5:05pm

      Re: Cut the Cord Myself

      they only sent us one box for one of the two HD receivers, they told us to keep the other receivers as they were 'obsolete'. Up until that month, they'd been charging me $15 a month for that 'obsolete' receiver.

      Brilliant. Good enough to charge you for, not good enough for them to actually want back, such that they basically admitted flat out that they'd been charging you the same amount of money for sub-par hardware.

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

  • identicon
    Anonymous Coward, 23 Jul 2018 @ 3:46pm

    Cut the cord; let the copyright cartel fall!

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

  • This comment has been flagged by the community. Click here to show it
    icon
    gillardmortgage (profile), 24 Jul 2018 @ 5:47am

    financial offer

    For more information to get a Loan please visit our website: www.gillardmortgage.com or E-mail: info@gillardmortgage.com

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

  • identicon
    Anonymous Coward, 24 Jul 2018 @ 1:14pm

    >new customers getting better deals than existing ones...

    Grocery stores have "rewards" for "loyal customers"....ISPs have specially-designed price-gouging tools.

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

    • icon
      That One Guy (profile), 24 Jul 2018 @ 7:06pm

      'Don't like our terms? Have fun finding an alternative.'

      In most cases grocery stores face this little thing called 'competition', where if you don't like what they offer and how they do it you can go elsewhere, giving them reason to provide you incentive to be a 'loyal customer' by sticking with them.

      ISP's on the other hand...

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


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