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Cable TV losing subscribers to economy, new technology

Updated: September 18, 2011 1:03AM



More consumers are cutting the cord on traditional cable TV, with analysts blaming the economy and technology.

Nearly every pay-TV provider is leaking subscribers.

The nation’s largest cable company, Comcast, lost 238,000 TV subscribers in the second quarter of this year; and No. 2 Time Warner Cable lost 130,000. Satellite TV provider Dish Network lost 135,000 subscribers. Its larger competitor, DirecTV, added 26,000, but that’s down from the 100,000 it added in the second quarter last year.

“People that are unemployed or underemployed . . . have to cut their expenses,” says Norm Bogen, analyst at market research firm In-Stat, “and one of the things they can cut is their pay TV.”

But there’s also tumultuous change going on in the TV business. The number of homes with traditional TVs has dropped from 115.9 million to 114.7 million, says Nielsen Media Research. Yet, total TV viewing is on the rise, because more viewers are watching Internet-delivered video on a PC, tablet computer or smartphone, Nielsen says.

As Internet video options evolve, an increasing number of pay-TV customers are dropping their service or sliding to a lower tier of service — and using the Web to get their entertainment content.

Even though some consumers are cutting, or at least shaving down, the cord, that’s not necessarily all bad news for cable companies. Comcast, for instance, added 144,000 broadband customers and, as remaining video customers spend nearly $140 per month, saw video revenue increase 10 percent.

In May, Comcast added on-demand movies to its free Xfinity app for iPhones and iPads; the standard app, also available for Android devices, lets subscribers watch live Customers may be cutting the cable, “but they are not getting rid of the TV experience,” says Jeff Weber, vice president of video product and strategy at AT&T, which added 400,000 U-verse subscribers in the first six months of 2011.

“They want even more content and more control in what they watch.”

To that end, U-verse has added a multiview feature that lets viewers watch four channels of their choice simultaneously, and the U-verse Mobile feature that lets customers watch programs on portable devices. Says Weber, “It’s almost the opposite of cord cutting.”

Pay TV is not going away. In fact, total spending on TV subscriptions, PricewaterhouseCoopers projects, will increase from about $75 billion in 2010 to $99 billion in 2015. Cable homes will drop slightly, and homes with Internet TV services such as Verizon Fios and AT&T’s U-verse are expected to grow, the firm estimates.

Gannett News Service



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