Cable TV Bleeds Subscribers, Internet TV Cleans Them Up

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Cable networks have been losing subscribers at a growing rate in recent months—and satellite providers haven't picked up the slack, according to an AP report. It's the strongest indication yet that online services such as Netflix and Hulu are snagging an ever larger share of couch potatoes.

Major cable TV companies suffered big losses this quarter. Time Warner, for instance, loss 155,000 subscribers, more than double what it lost year-over-year. Comcast, too, reported doubled losses of 275,000 subscribers for the quarter.

Meanwhile, web services have been thriving. Netflix recently reported a gigantic increase to 16.9 million subscribers, a 52% uptick. What's more, more than 66% of those subscribers are now streaming content via Netflix Instant—now available on the Xbox, Wii, and Playstation consoles as well as your computer. It's another strong sign users are viewing media less and less on the TV.

When I recently spoke with Bill Gorman, media analyst of TV by the Numbers, he still offered an old argument: "The danger to broadcast TV isn't the Internet—it's cable." That might have been the case with the big networks, but for cable, it's the opposite. The biggest danger to cable companies is the Internet.

The big push for Internet-connected televisions this holiday season would still introduce even more competition among cable nets. Using Google TV or Apple TV, consumers will more easily have access to a slew of free services, from Hulu to YouTube. And that's not to mention access to more free video on the web on sites such as ComedyCentral.com, which could make paying for a cable subscription a thing of the past.

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2 Comments

  • JenniferWeb

    It'll be a steady and painful decline for the Cable Co.'s. Look at video rental business....Only a few short years ago, I remember looking forward to going to Blockbuster to get a new release and just browse. Not anymore.
    Now the internet is changing tv viewing habits. I have recently begun getting almost all my TV online through a service called TVDevo.com . It's so much easier and there's tons more to watch compared to the cable package I used to have.

  • Randy Michael

    I switched to HULU & NETFLIX & HDTV Antenae from Directv after having been with them for several years. I finally got tired of getting wrong information every time I called customer no-service. They had put me under another contract last year without telling me when they came out to install an additional room. During that visit, they drilled through my duct-work. Instead of sealing, and moving over, they opened the ductwork up (5 inches) to be able to reach their hand in and put the cable through the top. I know this was a contractor, but they were their as a Directv agent. After having heated the underside of my house for 8 months, Directv said that they would consider whether they had any liability only after I had gotten 2 professional estimates for repair, and filled out a pile of paperwork. Even after pictures, and all of this effort they could deny. Charged me $300.00 disconnection fee after having been a customer for about 10 years. They did me a favor with the disconnection fee and the issues. They ran me off as a customer and now my cable cost are a whopping $90.00 less per month than before. Thats over $1000.00 per year in savings...and we watch everything that we want...all cable channels, all local channels, all sports stuff. Thank you Directv for being such an un-scrupulous company. If you have a question about whether or not to hook to directv, just search the internet for the unhappy customers who have now turned into not just unhappy former customers, but enemies of this company. GO HULU & NETFLIX! :)