Cord-cutting continues: Cable loses subscribers again in 3rd quarter

By Cecilia Kang

For the second quarter in a row, more consumers canceled their cable and satellite television subscriptions, according to analysts.

The closely watched third-quarter subscriber figure was attributed to the economic downturn that has some households rethinking monthly expenses. But the data also gives momentum to the questions over whether Internet television -- programs on Hulu.com and Netflix -- are cutting into the core cable business.

Craig Moffett, an analyst at Bernstein Research, wrote in a report Friday that in earnings announcements this week by the biggest cable companies, the industry appeared to have lost about 108,000 subscribers in the third quarter. The biggest firms (Comcast, Time Warner, Charter and Cablevision), representing 75 percent of all cable and satellite viewers, actually saw small gains in subscribers. But Moffett estimates losses by smaller paid-television providers will bring the overall industry to net subscriber losses.

The cable and satellite industry lost about 141,000 subscribers in the second quarter -- a first for the industry. That statistic, combined with reports by Netflix of booming subscriber numbers for its streaming service, has some analysts saying users are canceling cable service and going all Internet. That trend isn't being tracked, but some in the industry disagree. Tivo, for example, said in an interview with Post Tech that television viewers will stick with their cable and satellite services (mostly for sports and other live shows) and supplement that with Internet video.

"The evidence suggests that poverty is the problem," Moffett wrote. "But public sentiment, particularly among the technology press, strongly favors the Internet substitution thesis, and we don't expect that to change."

Other stories of interest:

Cable cord-cutting just a snip, but that may be changing

Post Tech on WAMU's Kojo Show about cord cutting

Tivo bets against cord cutting

Public interest groups call for investigation of TV Everywhere

Networks block Web-based shows from Google TV

Breaking down the battle over Internet TV