Ouch: Here’s more grim news on cord-cutting
Cable subscriptions fell by 705,000 over the past year, 12 times faster
August 12, 2016
Cord-cutting is becoming more common, that much is clear.
It started as a trickle. Right now it’s a steady stream. The question is whether it will become a deluge, and if so, how long until that happens.
No one knows for sure, and so every quarter they look for new clues.
The latest quarterly pay TV subscriber numbers show people shed subscriptions 12 times faster over the past year than they had the prior year.
That’s according to an analysis by BTIG Research. It reports that 705,000 people dropped their subscriptions to the top eight providers, including Comcast, DirecTV and Charter, in the 12 months ended in June.
That’s compared to 59,000 during the 12-month period that ended in June 2015.
The annual rate of subscription decline has hit 2 percent.
BTIG analyst Rich Greenfield blames the declines on several factors: inflexible packages, surcharges that drive subscribers nuts, and high overall pricing for cable compared to the low monthly prices of streaming video on demand.
“Increased cord-cutting and cord-shaving ties directly to our view that antenna households utilizing streaming devices are increasing rapidly, albeit off a low base,” he writes.
From up to down
It’s been a rapid turnabout for the industry. A few years ago, it was regularly adding subscribers by 1 or 2 percent each year, Greenfield notes.
“Now the industry is losing 2 percent through cutting/shaving, not to mention the growing pressure from cord-nevers,” he writes.
This hardly means a collapse of the industry. There are still some 88.5 million subscribers to the top cable and satellite companies.
The future for cable
Still, a big question is how they’ll continue to grow as subscribers decline. And one answer is they’ll be getting subscribers in other areas, specifically broadband subscribers.
On the same day the BTIG report was released came another report, from SNL Kagan, projecting more than $9 billion in revenue growth over the coming 10 years.
Though video revenue will decline, the forecast says broadband subscriptions will grow by some 8 million in that time, sparking the overall rise in revenue.
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