A Very Interesting Paragraph From …

… yesterday’s Wall Street Journal:

Meantime, over the past two quarters, the number of U.S. households that subscribe to cable and other paid TV services fell for the first time since the dawn of cable – by about 335,000 households out of about 100 million, according to data provider SNL Kagan.

Time Warner Inc. said last month it expects its HBO pay-TV service to lose 1.5 million subscribers this year, though it blamed the decline on the poor economy and changes in promotions, not on consumers replacing cable subscriptions with Web video, a practice dubbed “cord-cutting.”


That should work nicely.

Time Warner,

Just raise the prices on the remainder till you're still getting the same revenue stream.

dude

I would attribute it to the fact that there is little worth watching on TV anymore - the economy was just a catalyst. If i didn't watch sports, i would have dropped a long time ago.

Ian Kemmish

It seems slightly less interesting than the version of the same story which appeared here in the NY TImes, which at least managed to mention broadcast TV as well as web video.

On the other hand, one couldn't really expect one of Rupert Murdoch's organs to mention that the old enemy wasn't dead yet....

Mike B

Good, pay-TV is a massive rip off that survives on anti competitive bundling practices. What one gets for their 60 dollars a month are hundreds of channels that one never watches that individually provide very little original content, which in turn have very cheap production values. If one actually wants high production values be prepared to pay again for premium channels like HBO.

Someone needs to do for pay TV what iTunes did for music. Consumers need to be empowered to pay for only the content that they watch and leave the hundreds of useless, content recycling channels in the ash bin. I recently decided to forgo pay TV when my apartment unit dropped it as a perk and while I was tempted for a bit I realized that most of the time I just used the TV for background noise while I worked on the computer or other projects. The majority of cable TV only has about enough interesting content to grab my full attention about 15-20 minutes out of the hour. When I did the math to determine the actual number of shows I was really interested in and the actual number of new episodes they produced the cost per show was simply not worth it.

Pay TV is becoming a house of cards like music and publishing before it. It's built on consumers being locked in by restrictive technologies and bundling practices. People don't realize that the largest cost in Pay TV is their own time. As new media sources on the internet provided lower cost and more interesting content look for the bloated old media empires to crumble.

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Eric M. Jones

I am not sure it means anything except the contraction of households due to the economy. One cable subscription per household, but more viewers.

If Dexter weren't on, I'd consider cutting the cord.

Dave, Boston

It's like deja vu all over again.

Didn't I read the same paragraph in the Times this week?

Ben

I didn't want to rent a telephone from my communications provider in the 50's, and I don't want to rent video content from my communications provider now.

Steve Nations

I agree with Mike B regarding bundling. If I called up to subscribe to Time magazine -- and was told the only way to do that was to also subscribe to Sports Illustrated, Field & Stream, and Architectural Digest -- I would be furious. Well, I'm furious that I have to pay for so many useless channels just to get the ones I want.

Cable a la carte needs to get here soon.

calvin

I agree with Mike B too. My cable is massively overpriced as well. A la carte is the only way that I would pay for cable again. I watch CNBC, ESPN, A&E, Comedy Central and that is it. Most TV is just overblown celebrity news anyway. I promise you that the most savvy and independent minded young people will no longer pay for cable without thinking about it. When you look at the employment picture for my demographic and we start thinking about wants versus needs cable TV is one of the first things to be cut. This has been my experience in many different places throughout the country. The only thing keeping many of these people on the tube is football. ESPN 3 will fix that over the next few years.

jimmyc

A La Carte is here. Its called hulu. Or the internet. One price gets you the internet and much of the TV you enjoy. Sure it takes some work, but the reduction in commercials and the "watch anytime you want" options are worth it. You do miss out on cable channels, but most of the time you will find you aren't missing anything but rather enjoying your time doing something else.

Tim

I'm a mid-20's male, with a good job, my own house, and I don't have cable TV. I don't see myself getting it in the foreseeable future either. Give me Netflix and I'm golden. I don't have a landline either.

The people like me aren't replacing their older counter parts as they age and either pass away or can no longer afford cable in retirement. This trend will continue until they fix the broken system.

Nosybear

Interesting observation: Most business's business model goes stale before anyone realizes it - profits don't actually start to fall until after the stale date. And most will attribute the decline to some cause from their repertoire, not realizing the system that spawned the business itself has changed. Time Warner can't make money on the web distribution model without becoming a web distribution company so it blames the decline in business on something else. Meanwhile the consumer doesn't want HBO, they want to watch movies when they want to. Web distribution has even taken going to the mailbox out of the equation. But those in suits at the top of Time Warner, perceiving the environment distantly and distorted by all the layers of bureaucracy the signal has to pass through, still believe it's the economy, not a change in their business environment.

RC

If 50% of subscribers called their cable company(s) and stated that when their subscription runs out that they will not be renewing... you'd see some revamping on the part of the company(s).

And if in fact the subscribers didn't renew... you'd see more than revamping. You'd see the company(s) scrambling... and not scrambling their signals.

Wouldn't that be satisfying?

Joel Upchurch

I'm canceling my cable this month. My house mate was paying for it and he is moving out. I already bought an antenna and I've discovered I can record my shows in Hi-def using Windows Media Center. I'm even switching my Internet to DSL.

Uthor

@Mike B: "Someone needs to do for pay TV what iTunes did for music."

It's called "iTunes." You can buy most shows on there a la carte or subscribe to seasons. Etc. Or through Zune. Or watch for free on Hulu (pay for access to past episodes).

It all depends on how much you are willing to pay. I just got The Walking Dead through Zune and it came out to about $10/month for that one show. Now, between that and Hulu, that's all I needed and was cheaper than paying for cable. If I were to do that for 3 or 4 shows, it starts coming close to the price I'd pay for cable service, at which point cable may be worth it for the convenience (not having to hook my laptop up for Hulu and not having to run my Xbox for Zune).

VB in NV

I agree with Tim...Netflix's streaming content (via AppleTV) is wonderful.

ChefL

I just cancelled HBO/Showtime/Cinemax last week when I realized I was paying $50 a month for the two programs I watch. I've thought about giving up all computer and tv for a year just to see what it would be like, but the addiction is too strong.

James

But cable does provide a good high-speed internet connection. Indeed, where I live, outside city & suburbia, it is (or was, a few years ago when I first subscribed) the only practical one. So the cable companies' business model changes from providing content to providing connection.

GEM

We've been without a TV for 10 years now. In the last couple of years, when I hear about a show that I think I might be interested in watching, I look to the Canadian major broadcasters websites (Global, CTV, CBC) to see who's got it. Inevitably someone has the rights and is putting it up online for free.

Who needs cable? Not me.

Greg

The more interesting thing about the NY Times article was that it stated that 90% of US households have cable. Well, I guess only 10% of the US lives below the poverty line. Because if you have cable or sat then you are not poor. And if you have cable and are below the poverty line then too bad.

It is all about wants and needs.