The Cord Cutting The Pay TV Sector Keeps Saying Isn't Happening -- Keeps Happening

from the televised-revolution dept

"SNL Kagan estimates the combined cable, DBS and telecommunications (telco) sectors lost more than 1 million video customers in 2015. The 12-month decline was more than 4x the 2014 decline, and marked the third consecutive overall annual drop for the industry . That said, the waning months of 2015 carried signs of stabilization after steep losses for the better part of the year. The industry dipped by only 15,000 total customers in the period ended Dec. 31, 2015, essentially matching the losses of fourth quarter 2014."

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Several cable operators managed to eek out some modest subscriber gains in the fourth quarter of last year, prompting some renewed claims by the industry that cord cutting was "on the ropes" or was otherwise an unfair hallucination of the media. After all, Comcast saw a net gain of 89,000 pay TV users during the fourth quarter. Time Warner Cable similarly saw its best year since 2006 with a net gain of 54,000 TV subscribers. Charter also saw a net gain in the fourth quarter of 29,000 video subscribers. For some of these companies, this was the best performance they've seen since 2006.As such, cord cutting is clearly yesterday's news, right?Not so much. Full analysis of the fourth quarter and full year numbers by analysts like Leichtman Research indicates that while cable operators might have had a solid fourth quarter, most of them still saw a net loss on the year. As a whole, the pay TV sector as a whole lost 385,000 pay TV subscribers in 2015, according to Leichtman:And Leichtman's analysis, as a firm that has traditionally downplayed cord cutting, appears to be conservative. Full year analysis by SNL Kagan indicates the pay TV sector as a whole lost 1.1 million subscribers last year, four times the drop seen the year before:So why did cable have a better-than-usual fourth quarter? Charter, Time Warner Cable and Comcast have all been deploying faster speeds and new cable set top boxes, which appear to be luring back some customers that had previously fled to satellite and telcoTV alternatives. So what we're seeing is a lateral move of some customers between different types of legacy TV (deck chairs, Titanic, etc.), while cord cutting continues unabated in the background. Cable companies have also ramped up promotions in which they offer pay TV and broadband-- meaning many of these tallied customers may not even have wanted (or even use) television service.And it's worth noting these numbers may be even worse than they appear. For one thing, companies like Dish and Comcast have started including streaming video customer numbers in their legacy TV numbers to try and sooth investor worries that the legacy cable cash cow has caught a nasty case of pneumonia. You'll also note that as the housing recovery accelerates, broadband subscribers aren't growing in parallel, meaning there are millions of new home owners and renters that aren't signing up for traditional television service.So, no, despite some analysis you'll read, cord cutting isn't "on the ropes," "overhyped," or the rogue opinion of a few mean old bloggers and journalists. It's a continued, very real consumer response to an industry that simply refuses to seriously compete on price.

Filed Under: cord cutting, denial, tv

Companies: comcast, time warner cable