Cable TV Companies Could Lose Nearly $1 Billion in the Next Year From People Ditching Their Subscriptions (businessinsider.com)

Nathan McAlone, writing for BusinessInsider: Cable TV companies could lose nearly $1 billion to people cutting the cord over the next year, according to a new study by management consulting firm cg42. The firm estimates that 800,000 cable customers will ditch their subscriptions in the next 12 months. Cg42 expects each customer to be an average loss of $1,248 annually, and losses to approach $1 billion over the year. Cg42 also found that the average cord-cutter saves $104 per month by canceling. Some in the industry have argued that cutting the cord doesn't actually save you money if you subscribe to a bunch of streaming services like Netflix, HBO, and so on. But that point of view neglects the reality that many cable subscribers pay for those streaming services already.

Comments

Saving Money

[Oswald McWeany]

Unfortunately a great number of us don't have any alternative once we cut the cord.

Sure, I'm not paying $80 a month in cable bills any more- but I'm still paying $50 for the data (no option- they have a monopoly on connections fast enough to stream). So- then I add Hulu, and Netflix (the wife has Amazon from a student account). Bang- I'm right back to the price I started with.

Re:Saving Money

[Oswald McWeany]

I will say though... other than sports being harder to watch, I'm much happier with having Netflix and Hulu than I was when I had cable. I like being able to pick what I want, rather than reality TV shows being on every channel and that's my only option. History Channel reality TV, discovery channel reality TV... ARGH!

Streaming is fragmenting though. Yahoo is stealing some shows from Hulu. CBS is going solo. BBC is launching their own separate channel. Soon it will be more expensive to cut the cord because streaming is fragmenting so badly.

Re:Saving Money

[networkBoy]

*if* you didn't already use those services.
I found that my kids and I almost never watched broadcast TV, but we used Netflix (and Amazon Prime to a much lesser extent) more than TV. It was so bad that we lost the remote control and no one cared. so I turned it all of, data only. Totally worth it. The only real difference is now when a series I really like hits one of the streaming services I don't get enough sleep because I binge, rather than DVR and watching (roughly) when it was broadcast.
-nb

"Lose?"

[ShaunC]

They won't lose any money, they just might not make as much. No company is entitled to continued steady profits.

Re:"Lose?"

[Jawnn]

They won't lose any money, they just might not make as much. No company is entitled to continued steady profits.

That's communist talk there, mister. We paid good money to your elected officials to see to it that our profits continue. How dare you suggest that we are not then entitled to the representation that we paid for, fair and square.

Regards,

Your Friends at Comcast

Re:"Lose?"

[Obfuscant]

They won't lose any money, they just might not make as much.

This. The fine article is using the same kind of "lose" where a tax cut that leaves money in the pockets of the workers becomes a loss to the government. Or a 10% hike in funding for an agency or program when they asked for 20% is a "10% cut". It's starting with the assumption that the money belongs to the government or agency being funded (or the cable company) and if they don't get it for any reason it becomes a loss.

It becomes obvious when you look at the "loss" number ($1248/yr) and the "also found" (amazing discovery!) $104/month that the cord cutters save. Funny that -- a $104/month loss to the cable company is exactly what the customer was paying. I wonder if this "cg42" outfit realizes it is implying that cable companies are non-profits were these numbers true? (I.e., if my paying you $104 per month offsets your $104 per month loss, then you are making no profit!)

Re:"Lose?"

[CCarrot]

That's communist talk there, mister
communist talk would be 'you are required by law to buy 100 dollars a month' to make sure all the people who make tv shows stay employed.

So...the BBC model, then?

The content producers did it to themselves.

[Jason1729]

Maybe if they stopped putting huge ads with flashing animations and sound overtop of the content, it would actually be worth watching some of their content.

At least that's why I cancelled my cable subscription.

Re:Meet the new boss. Same as the old boss?

[drpimp]

Your assumption is many have switched to a new corporate overload but most may have just cut their bill substantially by dropping the TV out of their package. The real question is ... when are they just going to up the price of internet and include it all for that same bloated price and we are back to square one.

Re:Meet the new boss. Same as the old boss?

[surfdaddy]

Problem is that the way many companies price things, you don't save that much by cutting the TV. I have TWC and it's only like $20 cheaper/month if I cut TV and keep high speed internet. What we really need is a lot more competition, but the last mile problem is monopolized. I expect sooner or later somebody (Google, others) will find a way to solve that, as there is way too much money to be made by disrupting that last mile. It might end up being wireless last mile with other frequencies, mesh networks, etc. Or low orbit satellites.

They could easily fix it but they dont want to

[JustNiz]

If they let people only pay for the channels they want rather than force them to buy a whole package of useless crap, far fewer people would be cutting the cable.
The cable companies have known for years that people want this, but they remain too greedy/arrogant to provide what their own customers actually want, so the market is rightfully killing them off.
At some point they will finally be forced to deal with their own egos just to survive, but by then it will already be way too late for them, because most of their market share will have already moved to other sources such as Netflix, Amazon etc. that already do a much better job of meeting individual needs affordably.

Re:They could easily fix it but they dont want to

[Anonymous Coward]

The cable companies have known for years that people want this, but they remain too greedy/arrogant to provide what their own customers actually want...

Actually the production companies like Disney (ESPN, ABC, etc) usually require them to carry the other channels. So if you don't want sports too bad, you're getting ESPN. Cable and satellite companies don't have much leverage here. They can refuse to carry it, or package it differently, and then get their rebroadcast rights pulled. I expect this will happen to streaming as well. It's a lot like beer - the major brewers require stores to stock all their varieties of the same beer, pushing out the microbrews as much as possible. You don't get to carry one and not the other 10 that taste exactly the same.

Re:Meet the new boss. Same as the old boss?

[cayenne8]

Problem is that the way many companies price things, you don't save that much by cutting the TV. I have TWC and it's only like $20 cheaper/month if I cut TV and keep high speed internet. What we really need is a lot more competition, but the last mile problem is monopolized. I expect sooner or later somebody (Google, others) will find a way to solve that, as there is way too much money to be made by disrupting that last mile. It might end up being wireless last mile with other frequencies, mesh networks, etc. Or low orbit satellites.

Interesting, I'm cutting the cord, but I'm not counting my internet into the equation.

I have a business internet connection at home, I need it for work, so I'd have it regardless of any other need.

I have a business connection from Cox Cable for $69/mo....it is an old one that is grandfathered in. But nothing is bundled with it.

But I use AT&T Uverse, U200 package for TV and with it in 2x rooms, it was about $113/mo.

I've set up an OTA antenna that pulls in all my local channels. I hooked that into a Tivo Roamio OTA box for DVR, and I also have a couple of Tivo Minis for the office and bedroom TVs...and that streams the live and DVR'ed stuff to all rooms I need.

For what I call my "cable channels" that I would miss, like news (CNN, MSNBC, FOX, etc) and other entertainment like TCM, FX, TBS...all the ESPN's...I subscribed to Playstation VUE streaming, which runs on the Amazon FireTV (new version with better hardware) and have a box for that on each TV. The Playstation VUE system has a DVR like functionality built into it too, for show you "like" it records and keeps for at least 28 days. I liked this feature plus the better channel selection than SlingTV gave.

I got the 70+ channels package from VUE and is about $35/mo.

I was already streaming Netflix and have Amazon Prime.

So, I dropped my bill from $113 to $35 a month. I'm quite happy.

I've been trying to watch all the DVR content off my Uverse box and have almost done that. Likely after this weekend, I tell Uverse to take their equipment back and just enjoy what I have which I love so far.

I fiigure in about 8 or so months roughly, I'll break even on my equipment.

Re:Meet the new boss. Same as the old boss?

[PRMan]

This is very misleading. They say, "$20 a month". Then you get your bill and it's $60 because of HD fees, cable box fees, taxes, other unknown fees, etc. And then when your 1-year promo is over it jumps to $100 a month.

Cable Companies LIE to keep you...

[zarmanto]

Cord cutter, here. If you're thinking of joining me by switching down to an internet-only service, you need to know this: Your cable company is going to lie to you. They're going to tell you all kinds of stories about how they don't actually offer internet-only options, or about how it's actually less expensive to have a bundle than it is to go internet-only. Don't believe them. There is exactly one way to get the full truth out of them: Tell them you're cancelling. As soon as they transfer you to the retention department, someone who actually knows what they're talking about will happily give you that internet-only connection you're looking for, and most likely at a reasonable price, too... at least, for the first year, anyway.

Sidenote: Obviously, this only works if you have at least one other viable broadband provider in your area. If you live in one of the many broadband monopoly areas... well, in that case, you have my sympathies, because you are well and truly screwed.

Re:Meet the new boss. Same as the old boss?

[AvitarX]

The numbers seem way off (and prove false) in the summary.

If the average cord cutter saves 104/month, then the cable companies are losing more than that (as the average cord cutter is at the very least paying for one replacement content provider).

I currently pay 102/month, 65 (internet), 12 (hulu), 10 (netflix). I'm contemplating dropping netflix and HBO, and to watch thos shows with people I know (I do that primarily anyway). With Cable, I'd be at a similar price, Internet + Very Basic cable (broadcast channels) + HBO, around $95.00, add in netflix, I'm at $105,Hulu has some original content I like, but I would probably not pay for it just to avoid ad on new content, and just stop watching Casual and Difficult People.

So effectively, I save nothing nothing not having cable, but I don't have to deal with a remote, or their stupid box, or navigating their miserable on-demand, and I get recent broadcast fad free.

I suspect the typical person saves $25/month dropping cable though (having only one of netflix, hulu, hbo).

Re:Meet the new boss. Same as the old boss?

[Archangel Michael]

I'm surprised Comcast hasnt gone after Netflix already.

They have, and been caught. The whole Net Neutrality thing was over this very concept. The example was that the location of the Peering nodes were deliberately not upgraded an thus Netflix traffic was impacted. Netflix went so far as to say that they would pay for all the equipment needed at all of the peering locations, and even install CDN points INSIDE Comcast's network to help prevent the congestion problems for Comcast's Netflix customers. Comcast said no thanks.

Comcast has a vested interest in both Broadcast and Cable TV, and Netflix has a direct impact on both. Comcast is not going to help Netflix even if Netflix does all the work.

However, since this is all being done on the Network side, it is hidden (obfuscated) to the customer. All they know is Netflix streaming "sucks" a lot of the time, while Comcast streaming almost never does. The customer doesn't see it as a Comcast problem, they see it as a Netflix Problem.

Meanwhile, here in Europe ...

[stasike]

I live in Europe.
I pay 16Euro per month for 70Mbit/s Internet connection.
A "landline" is included in the price - IP telephony device included - with 20 free minutes to landlines here in my town and free calls within provider network and reasonable prices for calling cellular providers or out-of-town numbers.
AND, included in that 16Euro/month package, I get some 100 cable channels, with 15 most popular channels having an archive - ability to play, and skip adds for any program from the last 20 days.
I pay about 7Eur per month extra for package with various Discovery channels, History channel and cartoon channels for my kids (cartoons being the main reason I keep the extra package, because most documentary programs air various reality shows 95% of the time)

This is what you get when you do not allow companies to create artificial monopolies for the last mile.
I live in town and 5 different providers have fiber optics cable leading to my apartment building. People living in small distant villages have more limited choice, but they still can get ADSL for some 10Euro/month for uncapped contract, plus satellite package for TV for some 10Euro/month for about 100 channels.

Re:Meanwhile, here in Europe ...

[MooseTick]

We get it. Internet is cheaper in Europe. Everything else is more, but you get fast cheap internet.

In America, gas is only €0.47/L. as opposed to €1.23 in Paris or £1.12 in London.

Re:Meanwhile, here in Europe ...

[JeffOwl]

We didn't let the companies create the artificial monopolies, our government created them.

Cg42 wins maths

[viperidaenz]

Cg42 expects each customer to be an average loss of $1,248 annually, and losses to approach $1 billion over the year. Cg42 also found that the average cord-cutter saves $104 per month by canceling.

And after further investigation, Cg42 has discovered there are 12 months in a year.

I guess I'd phrase it differently

[argStyopa]

"Cable companies raked in at least $1bn last year from people who really didn't need to be paying them."

Feels a little different that way.

Re:Meet the new boss. Same as the old boss?

[JustSomeProgrammer]

My bill dropped about $100. I didn't change my streaming services because that was how I preferred to consume content even when I had cable so for me don't really factor into the equation. Besides my streaming services together are about $50 a month. (I have 4.) My bill was around $170. Cutting cable dropped it to $70. Just to provide a counter anecdote to your anecdote. As long as you're continuing to get any level of cable at all there additional fees you're paying that with just internet you don't have to. I also decided to buy my own cable modem which will end up only paying off if I stay subscribed for a year, but it is unlikely that I won't use internet for more than a year. You pay rental fees on your cable box, your cable modem, and there's taxes involved. Oh and I decided to increase my internet package or it would have been only $60 a month.

Re:They'll just raise the rates for everyone else

[amicusNYCL]

Oh, is that what Bernie thinks? The numbers that I see are that people who earn less than $250k have no change in their taxes, and that people who earn more than that have several new brackets they would fall into. There's a small case where people making between $464,851 to $499,999 would actually see their taxes fall by a couple percent, otherwise the new tax brackets for the highest earners ($10 million or more) would go from 39.6% to 52%. If you also include the proposed 2.2% medicare flat tax, then that raises everyone's taxes by 2.2% more and brings the highest earners to 54.2%.

So anyway, where is your 90% number coming from? I'm curious about your source for that one.

Haha, no I'm not, I'm kidding, I know you're full of shit and just wanted to call you on it.

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