Cable TV’s greatest threat, people who cancel their cable programming subscription and watch shows via broadband, has become more menacing. According to new data, the number of cord cutters rose by a million in the third quarter.
Third quarter earnings data indicates that a million more US pay TV subscribers cut the TV cord last quarter. Only five of the seven biggest pay TV providers have released their third quarter subscriber data, but collectively these companies saw a net loss of 632,000 pay TV subscribers during the period (385,000 for AT&T and DirecTV, 125,000 for Comcast, 104,000 for Charter, 18.000 for Verizon FiOS TV).
The subscriber TV owners have been unable to come up with a model to stop the trend. A high-end subscription with one of the largest providers, Spectrum, offers hundreds of channels. Many of these produce high-end programming and include HBO, Showtime, Cinemax and Starz. These packages can rise to as high as $200 a month. Packages with sports channels can be nearly as expensive.
Among the competition that traditional TV subscription services face are Netflix, Amazon Prime and Hulu. All offer monthly fees in the $12 a month range. Some live-streaming sports events are available for free, although most of these services are in trial stages.
Traditional subscription TV has few options to reverse the trend. It has extended subscriptions so they work on TVs, PCs and smartphones. However, price cuts may be the only model that can help them hold the line against cord cutting. That erodes margins, and it might even cause options, which makes it a decidedly poor option and one that is not sustainable.