Cable Companies Look To Slow Down Or Stop Cord Cutters In Their Tracks

The younger generation, also known as millennials who started reaching their adulthood in the year 2000, have a whole new opinion on how to pay for television than past generations.

Despite the fact that they watch more content, they’re finding this content through other means than the conventional cable TV route that older viewers tend to rely on. And, as they leave home and begin their own family, many opt to cut the cord and use a mixer of less expensive paid and free services such as Netflix, Hulu and Google’s YouTube.

In a Leichtman Research Group report, there was a loss of 150,000 subscribers to paid cable TV services during the third quarter.  This trend of cord cutting appears to be getting faster, which is why cable companies are doing everything they can to safeguard their bottom lines.  Comcast lost 81,000 subscribers during the same quarter. Verizon is testing less expensive cable packages, and saw a gain of 114,000 subscribers.

According to SNL Kagan data, all total for the year 2013, the cable industry lost around 250,000 subscribers. While it’s not significant, it is a sign for the industry that there is a drop. The data also denotes that prices are a key reason for the drop. Satellite TV, which is typically less expensive, saw a smaller decline, and phone company pay TV, saw increases.

Along with Comcast’s drop, Time Warner Cable saw a drop of 182,000 subscribers and Cablevision saw a drop of 56,000.

The LRG information suggests cable companies are victims of price shoppers – something they’ve not yet dealt with before. Therefore, they must prepare themselves for competition where people pick no cable or inexpensive cable.

Cord cutters still need Internet service if they want to access the digital content, which is allowing cable companies to raise their broadband prices but only for a short-term solution.  They’re enticing would-be cord cutters by providing them with better content package with Internet for less money. Verizon, for instance, has a $59.99 package that includes local TV stations, Showtime or HBO, broadband service and free year of Netflix – not including taxes and fees.

It would appear that this kind of deal could slow or halt the speed of cord-cutters, but with a cost. These subscribers tend to contribute less to the company. However, it could work in their favor by keeping them first and determining how to attain more money from them later on.


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