'Six People Cut the Cord Every Minute' (1 Viewer)

[Martin Dew]

Martin Dew submitted a new blog post

'Six People Cut the Cord Every Minute'

Continue reading the Original Blog Post.

 

[David Norman]

Back of the envelope calculations and highly jaundiced counterpoint:

I've been constantly/nonstop hearing of this massive cord cutting that has been going on roughly starting in the early 2000's or so. Supposedly in the last 5 years a MASSIVE exodus of customers have been fleeing in droves leaving the CableCo with virtually the number of customers that frequent an Open Blockbuster Video. Again, even the CordCutter numbers seem to leave me a bit baffled where the massive exodus is

2007 97M customers
2011 100M at $73/month -- approx $87B annual revenue
2018 94M at $106/month -- approx $119B annual revenue about a 5% increase annually
(Best numbers I can find suggest roughly 5% increase in the US population in the last decade)

Now what I don't know is whether that revenue is specifically PayTV only or whether that includes all bundling (internet, phone, etc).
If the Internet slice is separate and since I suspect a lot of those cord cutters may well be paying the same PayTV company the same amount of money monthly anyway for Broadband access (which the PayTV companies don't have to share a penny with TV Rights holders, Local TV stations, etc). I'm not really shedding many tears.

Many of my "pretend that they're CordCutting friends b/c it's really cool to say it loudly in public" are all too fond of bragging that they've cut that cord 5-10 years ago when in reality they're just planning on it (for the 8th straight year and counting). I asked a bunch of the actual cord cutters one time to show me their monthly budget numbers -- TV + Phone + Broadband + Netflix/Hulu/Filmstruck/etc streaming services they were paying each month. Interestingly I found most of the cord cutters were paying about 20% more per month total than they were before once everything was included and even a little more once all their extra streaming boxes and devices were prorated into the cost.

The amt of money they were still paying to DirecTv/Charter/TWC/ATT/Comcast, etc was overall higher than 5-10 years ago (even with minimal inflation adjustments) plus they paying extra each month often for multiple streaming services. Overall this was mostly an older crowd, but while the younger people in the group were more likely to actually be PAYTV free, but they were also far more likely to have 300-1000 MB Internet speeds and several streaming services. I won't even get into the obscene CellPhone charges I saw from many of them with up to 4-10 personal Smartphones/family

The reckoning may be happening glacially for a couple small subgroups, but overall the companies PayTV companies don't seem to be going out of business and their total revenue and profits aren't really falling. They are changing and adapting, but I don't see Kmart/Sears/Blockbuster style issues in their future.

 

[dvdclon]

The graphic on the original post led me to think people were cutting their electric power.

Most of my CordCutter friends operate backhoes.

 

[Mysto]

We can't the cord as long as the cable company owns the internet connection. Lose revenue on cable - raise it on internet. It's a myth.

 

[EricSchulz]

We can't the cord as long as the cable company owns the internet connection. Lose revenue on cable - raise it on internet. It's a myth.

Yes, that's true. BUT....my cable/internet/lowest tier channels (HGTV, CNN, Food Network, etc.) was costing me $160 three years ago. Most of the channels I never watched. I already had Netflix and Prime. Now I've added Hulu and my cost per month is just under $100 internet and those three channels. And I watch more of what I have.

 

[Jeffery_H]

Spectrum cable is the only option besides DirecTV or Dish in my area. In fact some areas you can't even put a satellite dish in your yard or on your house due to neighborhood ordinances. Some want all homes around them to have clean yards without any clutter or items like that at all.

The "Cord-Cutting" is just what's in for today's trend, especially millennials. You never actually cut any cord, you simply remove a service, as you still must at least have an internet connection of some kind for the bandwidth. While it's true some areas have WISP service, you still have to deal with latency issues vs hard wired cable type connections from either the phone or cable company if you want great streaming.

Spectrum and many others charge more for just internet service, but the price goes down as you add cable TV and/or phone to the bundle. Then you have to factor in that many streaming services don't offer local channels for most people unless in a major metro city at this time. Many local stations have exclusive agreements with cable providers and satellite, but that does not extend to their internet streaming content. Yes, you can get a good indoor HD local TV antenna, but then you must either sit it on a stand or mount to a wall. Another ugly device if you want a clean flatpanel wall mounted look. Assuming that was OK, you still have to make sure it's in a good area for reception, trust me I know. If you want locals in other rooms, that means more ugly antennas and chances are you won't get good reception or any in some of those places.

Next is local weather on TWC, local channels or cable channels like Spectrum News/Weather. Some may not care but for those that travel for work, needing to know weather for departure and arrival or especially farmers, it's a very big deal.

By the time I would buy my internet and steaming service, add antennas, etc. I was actually paying $25/month more than what I could get a bundle for even when the 12/mo promo price expired.

 

[EricSchulz]

And then there's this...

https://www.theverge.com/2018/8/13/...y-deals-old-media-disruption-recreating-cable

 

[David Norman]

"To put the scale of the potential threat of cord-cutting in perspective: for more than a year now, Netflix has had more subscribers in the United States than cable television, and the speed of changeover is only increasing. According to eMarketer, an estimated 22.2 million people switched from cable subscriptions to streaming content in 2017, a 33.2 percent growth over the previous year."

I think this is the issue -- there is no way this paragraph and the OP can possibly be reconciled with some real fuzzy math and/or incredibly poor mis-use of statistics. If Cable/Sat were losing 20M per year, then there would be something to worry about with a starting base of 100M, but I'm going to say this article is incredibly wrong. I think I'm going to trust Bloomberg a bit more on this issue since it seems to fit the actual households I know.

What could they have possibly meant?
22.2M people switching, but neglected that 21M switched from streaming to Cable?
22.2M people added streaming and most kept their Cable too? Sounds more like it though it doesn't seem to indicate Gross/Net movement.
22.2M people added streaming, but 21M of them just switched from one streaming service to another rolling those Free Month offers over and over so they never have to pay for any service.

 

[Neil Middlemiss]

"To put the scale of the potential threat of cord-cutting in perspective: for more than a year now, Netflix has had more subscribers in the United States than cable television, and the speed of changeover is only increasing. According to eMarketer, an estimated 22.2 million people switched from cable subscriptions to streaming content in 2017, a 33.2 percent growth over the previous year."

I think this is the issue -- there is no way this paragraph and the OP can possibly be reconciled with some real fuzzy math and/or incredibly poor mis-use of statistics. If Cable/Sat were losing 20M per year, then there would be something to worry about with a starting base of 100M, but I'm going to say this article is incredibly wrong. I think I'm going to trust Bloomberg a bit more on this issue since it seems to fit the actual households I know.

What could they have possibly meant?
22.2M people switching, but neglected that 21M switched from streaming to Cable?
22.2M people added streaming and most kept their Cable too? Sounds more like it though it doesn't seem to indicate Gross/Net movement.
22.2M people added streaming, but 21M of them just switched from one streaming service to another rolling those Free Month offers over and over so they never have to pay for any service.

I suspect it’s a typo in the Verge article (2.2MM instead of 22.2MM)

 

[Neil Middlemiss]

And for the record. We “cut the cord” in my house, which simple meant dropping the DirecTV service, and adding Hulu instead. We were already paying for internet and Netflix, so the net savings in my household is about $100 a month. We lost some channels that we watched and aren’t available on streaming services without cable, but for us the financial benefit outweighed the loss of those few channels.

 

[David Norman]

I'm not saying at all there aren't some people who legitimately have cut the cord, but the hordes of people running for the exits seems to be
far exagerrated over the actually real numbers. I have seen those 10-20M+ numbers in other articles however, but the context almost always seems to be missing.

If the CableCo add $20 to a monthly Internet Only fee for unbundled invloce compared with the bundled price of TV+Internet at a higher monthly charge, but having to pay subscriber fees to a dozens of networks, they may actually have lower Gross Revenue but significantly higher Net Revenue in the end. In the end they may be perfectly happy to off-load the TV part of the business until a real Internet broadband competetion shows up.

 

[Neil Middlemiss]

I'm not saying at all there aren't some people who legitimately have cut the cord, but the hordes of people running for the exits seems to be
far exagerrated over the actually real numbers. I have seen those 10-20M+ numbers in other articles however, but the context almost always seems to be missing.

If the CableCo add $20 to a monthly Internet Only fee for unbundled invloce compared with the bundled price of TV+Internet at a higher monthly charge, but having to pay subscriber fees to a dozens of networks, they may actually have lower Gross Revenue but significantly higher Net Revenue in the end. In the end they may be perfectly happy to off-load the TV part of the business until a real Internet broadband competetion shows up.

I’ve seen the number “33MM” used in several articles discussing the number to which the cord cutting amount will grow to, which I always take to mean the total aggregate number of households that no longer pay for cable/satellite (since the start of the overall decline, I assume). The projections for cord cutters in 2018 was projected to be 5.3MM (or a number close to that) which would represent quite the acceleration of it turns out that way.

 

[Josh Steinberg]

I have thought about cutting the cord in years past, and the thing that kept me from doing so was the way that cable and internet services were priced. For the longest time, it seemed that if I just canceled the cable portion, they would then jack up the cost of internet access on its own to nearly what I was paying for both. And my rationale was, if I’m basically gonna be charged for both, why bother canceling?

But I’m almost ready to reconsider. In the past few years, the number of new shows I watch has dwindled into near non-existence. I worry that it’ll “feel weird” to not be able to turn on my TV and receive a live signal from the world, but I think that’s basically a straw man at this point. And in terms of missing out on actual programming, I don’t think I will thanks to services like Hulu. We already have Hulu and the technical quality often exceeds that of the cable box anyway. I like the idea of being able to come home from work and channel surf to relax, but I realize that in practice, I never actually do that. My viewing is all on a “What do I feel like watching?” basis and not a “Let’s see what’s on and pick from that” basis and hasn’t been in well over a decade.

And in terms of not being able to watch new shows...so what? Last year, one network debuted a new show that I enjoyed more than anything I’ve seen on TV in years. The network was Fox, the show was “The Orville,” and it was only a twelve episode season, followed by a two year hiatus. It’s probably not worth paying whatever I’m paying just to be able to watch a dozen episodes of a show I like on the night that it airs every other year.

I’m just realizing that my reasons for keeping cable are far more emotional than practical. Having cable ended up being the benchmark that I used to measure my success. “I can afford cable” meant that I was succeeding at adulting. I need to let go of that idea. And besides, I can afford cable...I’d just be choosing not to spend my money on it, which would be different than not having a choice in the matter.

 

[David Norman]

The projections for cord cutters in 2018 was projected to be 5.3MM (or a number close to that) which would represent quite the acceleration of it turns out that way.

So 5+M net will completlely cut the cord in 2018 despite the Bloomberg Chart suggesting that only 6M Net subscribers have left since 2010-2011 and steadily 1M per year over the last 4 year. Color me still skeptical. There are just too many people like Josh mentions who are set in their habits -- possibly older generation and folks like my wife who might kill me if I even suggested the thought.

 

[Bob Cashill]

...and there are saps like me who have just about everything (Spectrum cable, internet, landline, most of their movie packages AND a few subscription streaming services), love it, and won't give any of it up! HA!

 

[Chip_HT]

I always want to ask how many of the cord cutters are just mooching off of someone else's cable credentials to stream.

 

[Jesse Skeen]

Haven't seen any reason to have cable in over 25 years. I've never gotten internet from the cable company either, and would probably go back to dial-up before doing so, especially from Comcast.

 

[David Deeb]

For those thinking about cutting that cord, just do it!

It is not “more”. We cut cable tv years 3 ago & saved a small fortune. Yes, Internet service may be slightly higher than it would be bundled with tv service. But it is still much less. Less taxes, and less fees as well.

If you find you miss cable tv service so much, guess what...you can resubscribe any time. I’m sure the cable company will be thrilled to have a returning customer.

I feel the quality of programming on OTT subscriptions is of higher quality than the live, commercial-saturated junk of cable networks. I will never go back.

Please don’t fall into believing that cutting the cord will cost more. It won’t unless you are trying to prove it will cost more by over subscribing to more services than you can possibly watch at any one time. It’s like buying that gigantic amount of food at Costco just to only use 1/4 of it before it goes bad & then throwing the rest out.

 

[Josh Steinberg]

Things may have changed since I last spoke to the cable company about it - it was probably ten years ago that I last looked into it. I don’t remember what the exact figures were but they were going to double my internet bill if I removed cable, so I didn’t. I have no idea what the SOP is these days.

 

[David Norman]

It will save some money for some people, it won't save any money for others, and for others it will be an increase.

It all depends on where you live and what options you have, what you watch/what you're willing to give up -- if everything viewable is crap then it's irrelevant anyway. If you like 10 different News Channels, multiple sports offerings, in addition to scripted TV shows not available OTA then you either learn to live without them or you pay for what you want to watch.

With my current service if I dropped PayTV completely and kept just the Internet/Phone at current levels my bill would drop about $40 or max 50 per month. Add Netflix/Hulu/Sling or any of the multitude of streaming services to gain access to what I want to watch and it's a $10-20 max saving assuming the Internet speed could handle it which I'm not at all convinced. If I have to bump to the higher speed internet then I'm in the hole already.

My area has choices of Spectrum broadband 60-300 level service and I'm at 60 now, ATT U-verse maxes at 25 on a good day and nobody is happy with them since even that level is closer to 4-6 most days. Everything else is less 2 download speeds so no way that works so it's not even like I could cycle introductory offers every 1-2 years.

I could drop VOIP phone service as well and save $20-30 per month, but my current Security System would then have to be put on Mobile Call in at an extra $10-15 per month plus I'd probably need to go back to regular Cell Service and drop the $5/month Tracfone's I use