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Posted February 11, 2009
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The Next Little Thing: Technology breakthroughs |
Cable Companies Panic as Viewers Shift to Internet
Cable operators are starting to notice. Glenn Britt, chief executive of Time Warner Cable Inc., voiced his concern Wednesday in a quarterly earnings discussion with analysts. "We are starting to see the beginning of cord cutting," he said. "People will choose not to buy subscription video if they can get the same stuff for free." It's tough to pin down how many people actually have given up cable - most of the evidence remains anecdotal - and which customers moved to a competitor. Still, Time Warner Cable, the nation's second-largest cable operator, lost 119,000 basic video customers in the fourth quarter, even after excluding subscribers it gave up from the sale of some cable systems. The company also posted slower growth in new digital cable TV, Internet and phone subscribers. More details will emerge as other cable and satellite TV operators report earnings in the coming weeks. This is not to say that the cable business is in trouble. It's a mixed picture in this economy. While there will be some people who will completely give up their pay TV service, many folks will keep the subscription but cut back instead on going out to the movies. They also might give up a movie channel or two and buy fewer pay-per-view shows. But pay TV providers are right to be alarmed. Not only has a flood of TV shows and movies become available online, but the video quality has gotten better. Netflix is expanding its service that lets subscribers stream movies and shows from the Internet at no additional cost. And more and more people have home broadband - 57 percent of American adults, according to the Pew Internet and American Life Project. Throw in the worst economic slowdown in nearly a century and people question whether they still want to pay for cable or satellite. As of January 2008, the average monthly home cable bill was $84.59, up 21 percent from two years earlier, according to the Federal Communications Commission.
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