August 28, 2015 Last Updated 9:27 am

Cord cutters hurting more than just cable subscriber levels, as viewers move away from some cable-only channels

Programmers see viewership fall as channel surfing behavior declines as cable subscriber levels decrease due to increase use of TV box top devices increases

The cable companies appear ready to accept their fate and begin offering on demand services to TV viewers tired of expensive cable bills. But the strategy likely to be employed is simply to shift from marketing the large number of channels they offer, to one in which consumers now have choice, but will have access to far fewer channels (unless they are willing to pay, in which case their bills will go even higher).

According to a report compiled by Leichtman Research Group, only Verizon’s FiOS service has seen a net gain in subscribers recently. So, facing what it sees as an irreversible trend, cable executives are ready to switch gears.

cablesubs-chart-580“The question is how do you take the programming that everybody wants and make it on demand,” CBNC reported Jeff Bewkes, CEO and chairman of Time Warner, saying at a recent conference. “That’s why the reaction is oversold, because the kind of pessimism or concern — if it was right — would mean the entire industry would never figure it out.”

While some have expected Apple to enter the fray, offering a low priced alternative to cable, it has faltered, unable to get the content providers to come on board. As TNM reported yesterday, one reason may be that Apple is falling behind its competitors in the space and may not have the leverage it has in other areas of tech.

But that has not stopped consumers from continuing to cut the cord. Higher cost, lower quality, and the growth of quality programming coming from such media brands as HBO and Netflix likely contributes to the trend – as does a soft economy.

A recent Nielsen report shows what impact this behavior is having on viewership on cable systems. According to Nielsen, A&E saw a 36 percent decline in viewership in July, while TNT saw a 22 percent decline. Nielsen pointed at a change in the way TV viewers watch programming – from binge watching, to using 3rd party devices, fewer TV viewers are watching TV though their cable subscriptions. This effects the cable companies, but it also is effecting networks that are not attracting viewers with shows where the viewer can watch a whole season in a compressed period of time.

While the cable companies may believe they are well positioned to start offering on demand services in place of large channel offerings, their ability to absorb the revenue losses could lead to a shake-out in the industry.

“Some companies are very well positioned, other media companies, traditional content players, maybe not so much,” said Mike Fries, CEO and president of Liberty Global.

  • adam mason 1 year ago

    Maybe it is too difficult for the elites to figure out, but a high price with a low return, drives people out of satellite and cable TV. We had a moderate DirectTV package and after a year, the price jumped to over 1700 dollars a year, with a guarantee that they will go. Never mind the lies, poor customer service and hidden costs.

    We found that with a 19.99 HD, one for each of 4 TVs coupled with Amazon Prime, Hulu Plus, Netflix and HBO Now we pretty much have all we need for a fraction of the cost. We are learning that most of the channels we watched we do not miss thus no driving force to return to be abused by the likes of DirectTV.

    Every now and then We’ll buy a season of a show we might miss. Most of them cost less than going to the movies. Instead we make our own popcorn and binge.

    The providers have done this to themselves. They can try all the tricks they want and provide steaming packages that are crap for more money than Netflix, way more and people will move on because they don’t have a contract they have to pay. Until these greedy pigs figure out they are to blame for taking all of us for a ride then they will lose. People are figuring out they don’t have to buy anything.