The economic downturn has US cable television companies shedding subscribers in record numbers and people in the US are increasingly “cutting the cord” in favor of cheaper online options, new research showed.
The findings point to a growing pool of potential customers for online services, such as Hulu and Netflix and newcomers like Apple TV and Google TV, which offer lower prices and more flexibility, analysts said.
According to research firm SNL Kagan, US cable operators lost 741,000 basic video customers in the third quarter this year, the biggest decline since it started tracking the segment in 1980.
Comcast Corp, the largest US cable operator, lost 275,000 video subscribers during the third quarter, while Time Warner Cable, the second-largest, shed 155,000 video customers in the July-to--September period.
The pay television sector — which includes satellite television and TV services offered by telecom firms in addition to cable — lost 119,000 customers in the quarter after gaining 346,000 a year ago, SNL Kagan said.
Combined with a loss of 216,000 customers in the second quarter, the first ever decline in its history, the pay television segment has fallen 2.3 percent in the last six months to about 100 million subscriptions, SNL Kagan said.
Cable television executives have pinned the blame for the unprecedented losses on high unemployment and the recession.
“I think there’s much ado about very little in terms of all the talk about cord cutting,” Philippe Dauman, president and chief executive of Viacom Inc, told financial analysts on the television titan’s latest earnings call.
“We don’t see cord cutting as affecting our business,” said the Viacom chief, whose properties include cable networks Comedy Central and MTV.
“I think it’s remarkable that in the teeth of a powerful recession that we went through that continued viewership of subscription television held up as well as it has,” Dauman added. “And as the economy recovers we expect to see the number of television subscribers in the US grow at a better clip than it has over the last year and a half or so.”
As for Netflix Inc, Dauman said it has “positioned itself, not as being a substitute for television viewing, but as a complementary service and that is the way it is being used.”
Netflix claims more than 16 million members in the US and Canada and last week unveiled a US$7.99 monthly plan that allows unlimited streaming of movies and television over the Web.
Hulu, which is owned by The Walt Disney Co, News Corp and NBC Universal Inc, recently introduced Hulu Plus, which offers online viewing of recent television episodes, also for US$7.99 a month.
While penny-pinching in hard times is behind the decision of many in the US to abandon pay television, industry analysts said there are signs that some are replacing cable with the newly available online options.
“It is becoming increasingly difficult to dismiss the impact of over-the-top substitution on video subscriber performance, particularly after seeing declines during the period of the year that tends to produce the largest subscriber gains,” said Ian Olgeirson, senior analyst at SNL Kagan.
Jeff Kagan, a telecom industry analyst, who shares the same name, but is not affiliated with SNL Kagan, said US consumers have lived with costly monthly cable bills for years because they had no choice, but “now things are changing.”
“Suddenly there is competition in many markets from satellite television companies and the [Internet protocol TV] services from phone companies,” he said. “Suddenly the economy is rough and people increasingly want to save money.”
“Suddenly there are new services that are popping up like Google TV and Apple TV and more, taking us away from traditional television,” he said.
While some people undoubtedly are, they remain a tiny minority for now.
According to a study released last week by consulting firm Frank N. Magid Associates, only 1 percent of US consumers have canceled their television subscription in favor of accessing content available on the Web and only 2.5 percent of consumers use Internet content exclusively.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last