A little over 1 million people did it in 2012. And in 2013, another 4.7 million more did it. Did what? Dropped their cable TV subscriptions. Cancelling of cable TV subscriptions, known as “cord cutting” or “cutting the cord,” is becoming more prevalent, as the figures from statista.com used to open this article show. Former cable TV subscribers increasingly are turning to the Internet to stream content from providers such as Netflix, Hulu, and Amazon for a fraction of the cost of a cable TV subscription.
While the number of cord-cutters is small compared to the number of cable TV subscribers (about 100 million U.S. households have a pay TV subscription, according to The Wire ), they are growing, while cable TV subscriptions are not, as illustrated by this Business Insider report. This of course has caught the eye of the cable industry, which isn’t about to stand idly by and just lose customers. It is implementing several strategies to fight the flight. Most of these strategies aren’t ones that will benefit its customers, unfortunately.
About the only positive thing from a consumer’s perspective is that cable providers are adding more services and features to their TV lineups to entice their customers. Offerings now available include remote DVR control and content delivery via smartphone apps and on-demand movies and TV shows. In reality, these benefits just put the cable offerings on par with the streaming services, rather than make them better.
Prohibitive Costs Without TV
One of the more insidious tactics cable companies are using to coerce customers into keeping a cable TV subscription involves bundling, which is the packaging of several services, such as TV+Internet+telephone, at a special rate. The New York Times explains that, because of bundling, dropping cable TV and telephone service and keeping only Internet would lower a bill by a mere $10 . And as the article points out, a cord-cutter may end up shelling out more than they did prior to ditching cable TV after they add the requisite streaming content provider substitutes.
Comcast, already the largest cable TV provider in the U.S. even prior to a merger with Time Warner Cable, is tinkering with enforcement of its 300GB data caps. The Daily Dot recently pointed out that Comcast is experimenting in several markets with overage fees of $10 for every 50GB over its 300GB cap. As the Daily Dot article states, this will hit cord-cutters hard as they chew up their data allotment quickly to get all their entertainment; Daily Dot points out that watching Netflix on “high” playback can use 2.8GB an hour to watch high def programming.
Requiring a Cable TV Subscription to View Web Content
Another troublesome trend has seen networks require a cable TV subscription to log into their sites and access content. And it can’t be just any cable subscription. No, it has to be one that includes that particular network. For example, ESPN requires that you log in to its online content with a cable account that includes a subscription to its TV content in order to access its online content. Popular networks TNT and TBS went this way (as explained on the TNT FAQ page ) in the summer of 2013 and, as Gigaom states, ABC started doing so in 2014.
Comcast and Time Warner Cable recently announced a mega-merger that would combine the industry’s first and second-largest providers. The Dallas Morning News explains that this combo would not only give the cable industry a lot more leverage when negotiating fee structures with content providers but limit consumer choice as providers merge to combat the Comcast-TWC behemoth. Already Netflix’s negotiations to show up on TWC’s set-top boxes has stalled, reports Slashgear.com.
The Future of TV?
Though cable execs downplay the cord-cutting phenomenon publicly, recent actions show that the cable TV industry is worried. And it’s willing to play hardball, as evidenced by the Comcast-Time Warner Cable merger and tactics such as pressuring Nielsen to not publicize cord-cutting data . Where will this leave the consumer? Who knows, but don’t be surprised if some big obstacles spring up on the cord-cutting road.