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The Cord-Cutting Movement Is Over
Washington, D.C. (March 19, 2014) - RIP, cord-cutting trend.
The latest study from Leitchtman Research should, once and for all, end claims from some tech journalists and Wall Street analysts that a large number of Americans are dumping their pay TV service in favor of inexpensive online video. The study found that the 13 largest pay TV services lost just 105,000 net subscribers overall in 2013
Considering that the 13 operators offer service to 94.6 million subscribers, that means the losses represented just 0.1 percent of their audience.
Few trends can be based on 0.1 percent of any audience.
However, in the last year or so, leading publications such as Variety and GigaOm.com have written numerous stories proclaiming that cord-cutting -- so named because it suggests people are unplugging their cable/satellite/telco cords -- is for real and growing fast. The publications were bolstered by similar claims from prominent financial analysts such as Craig Moffett.
But the Leichtman study provides more evidence that the real trend is that the cable TV industry continues to lose video subscribers while its satellite and telco rivals are adding them, which makes industry subscriber defections almost a zero-sum game.
Also see: The Secret to Saving Money On Your TV Bill
Leichtman found that the nine leading cable TV operators lost 1,735,000 net video subscribers in 2013. But the telco TV services (Verizon, AT&T) added 1,460,000 net subscribers during the year and the satellite services (DIRECTV, Dish) added 170,000.
"While the overall market remains flat," Leichtman says in a press release, "further share-shifting has taken place."
Time Warner Cable, which was just purchased by Comcast for $45 billion (pending federal approval), is the industry's loss leader, dropping 825,000 net video subs in 2013. But Comcast continued to struggle during the year as well, losing 305,000 net video subs. (Although it did post gains for the first time in six years in the fourth quarter.)
The Leichtman numbers don't prove that no one is cutting the cord. In a so-so economy, the temptation to reduce one's monthly bill has tempted some Americans to rely solely on services such as Netflix, particularly people who are having trouble making ends meet. But the numbers do say -- loud and clear -- that relatively few consumers are cutting the cord. They may not like certain aspects of their pay TV service, such as the cost and possibly the customer service, but they are not ready to give it up.
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