SNL Kagan: 1.3 Million People Cut the Cord This Year

The traditional pay TV industry has lost 1.3 million subscribers so far this year, according to the latest analysis by SNL Kagan. The Wall Street research firm's analysis indicates that the sector lost 430,000 net customers last quarter alone, up from the record 812,000 customers lost by the sector during the second quarter. These defections come as customers increasingly grow tired of price hikes for bloated bundles filled with programming they simply aren't interested in, and the industry's ongoing resistance to cater to such a demographic.

Most of these losses are occurring at satellite TV and telco TV providers, with cable companies only losing 94,000 pay-TV customers in the third quarter, cable's best performance in 10 years.

While cable providers will tell you their reduced losses are thanks to incredible innovation in the sector, the reality is that cable operators are weathering the cord-cutting shift better because of their growing monopoly over broadband.

As companies like AT&T and Verizon exit unwanted DSL territories, the remaining telcos are saddled with significant debt and left incapable or unwilling to upgrade their aging copper networks to fiber at serious scale outside of most of the largest markets. As a result, cable providers saw 99% of the net broadband subscriber additions the last few quarters as users looking for speeds beyond 3-6 Mbps flocked to cable.

Those customers are coming to cable for faster speeds, and are being offered promotions whereby bundling cable and broadband is notably less expensive than just broadband alone. As a result, many of these customers are signing up for TV service they may not even want, and may not retain. And even if those customers decide to leave, cable providers can use usage caps and zero rating to give their own streaming services an advantage.

It's the telco TV providers that should worry, given they're simultaneously losing pay TV and broadband customers to cable. One analyst this week went so far as to predict that phone companies will never again see a collective net gain per quarter in broadband subscribers.