Cord Cutting Is Setting Records In 2019

(Mis)Uses of Technology

from the adapt-or-perish dept

Remember cord cutting? The trend that cable and broadcast execs and countless sector analysts spent years claiming either wasn’t real, or didn’t matter because it would end once Millennials started procreating?

Well it’s still very real, and once again the rate of traditional TV cancellations is setting records. The second quarter is looking to be particularly ugly, with giants like AT&T, Comcast, and Charter Spectrum all seeing big losses, but with AT&T’s being particularly ugly:

“But so far this quarter Comcast, AT&T and Charter have reported losing more than 1.25 million subscribers. ?As a result of this bloodshed, we are estimating that the rate of traditional cord-cutting will reach 5.5% in 2019 (the worst rate it has ever been),? Nathanson said.

“Even adding back virtual MVPD subscribers, the drop will be 2.7%, a new low,? he said, adding ?we would expect that this trend will continue to accelerate over the back-end of 2019.”

Again, customers are tired of paying an arm and a leg for a giant bundle of channels they don’t watch. So they’re axing traditional TV and shifting over to streaming video providers the data says not only offer cheaper, more flexible options, but far better customer service. Or they’re getting this content via an over the air antenna (for free), or via piracy. With a number of high-profile streaming options just over the horizon from the likes of Apple and Disney, competition in the space is only going to accelerate.

And while many traditional cable TV companies have responded to this surge in competitors by offering their own streaming alternatives, that’s no sure thing either. Just ask AT&T, which not only lost 778,000 traditional video users last quarter, but 168,000 subscribers from its streaming video alternative, DirecTV Now. Why? AT&T gobbled up so many companies in its bid to dominate the space, it became one of the most indebted companies in the world. When it raised streaming TV prices to try and recoup some of this debt, customers unsurprisingly headed for the exits.

Of course it’s always worth reiterating that these giant telecom and TV operators have an ace in the hole: the monopoly they hold over broadband access in many markets. Limited competition means they can respond to the loss in video revenue by jacking up the price of broadband. Worse, limited competition means these companies can impose anti-competitive (and utterly technically unnecessary) usage caps and overage fees they’ll often use as a competitive bludgeon. Many of these efforts simultaneously jack up your broadband bill, and punish you should you choose a streaming video alternative to their own TV offerings.

With the recent death of net neutrality, it’s likely there’s a universe of “creative” anti-competitive behaviors these natural monopolies haven’t been able to implement yet. Should the rules not be restored, that’s likely to change quickly over the next few years, and the impact on your bandwidth bill (and the competitive streaming playing field) isn’t likely to be subtle.

Filed Under: cord cutting, internet, tv
Companies: at&t, charter, comcast