Cable TV losing 1 million customers a year
May 22nd, 2009, 9:29 am · 33 Comments · posted by Tamara Chuang, a.k.a. The Gadgetress
Note to readers: Help me track TV prices in Orange County. Are you being offered a special deal for service? Or did your bill just go up? Tell me the prices, details and what city you live in. E-mail me at gadgetress@ocregister.com. Thanks!
Losing 1 million customers a year can’t be good for business. But when you’re so on top of the industry like the cable TV companies, it’ll take more staggering losses to lose your big lead.
The U.S. cable TV business serves 66 million customers and will remain the dominant paid-TV service for the next decade, predicts Mike Paxton, an analyst who watches the TV industry for market researcher InStat.
While newbies like telecom-based Verizon FiOS TV and AT&T U-verse have a lot more momentum and growth, those won’t be taking over in our lifetime, Paxton said. “Unless you’re 15,” he added.
| TV subscribers |
|---|
| Cable TV |
| 66 million |
| Satellite TV |
| 30 million |
| Telecom (FiOS/U-verse) |
| 3 million |
| Broadcast |
| 14 million |
| Total |
| 113 million |
| Source: In-Stat |
“Our U.S. forecast for the total households (ordering cable) is going down about 1 million a year,” he said.
You can’t blame the Internet for the declines, even as more people tune into free video sites online, like the TV-show heavy Hulu.com. Paxton has seen no evidence of this, “and we’ve been watching it very closely for six months.” Those niches, by the way, appear to be people who also subscribe to cable or satellite TV. “It’s an additive thing,” he said.
Rather, people are abandoning cable for other paid-TV alternatives. A big reason? Poor customer service.
“Cable has a long history of very poor customer service,” said Paxton, who is familiar with Time Warner’s effort merge its Orange County TV and customer service with the Adelphia and Comcast systems it acquired two years ago.
“A lot of the negative comments are certainly legacy customers. They hate the cable company because it’s the cable company. If people are really that upset, there are certainly other options,” he said.
“The competition for paid TV has benefited consumers greatly. We have a choice now. And it’s forced cable to roll out broadband and push telephone services, which in turn has pushed Verizon and AT&T to roll out video.”
The point is that cable households in the U.S. are shrinking. Satellite TV is flat with a little bit of growth. It’s the telecom companies — Verizon’s FiOS TV and AT&T’s U-verse — that are growing. Overall, the number of people who pay for TV service is growing about 1 million to 2 million a year. But the bulk of the new growth, however, stems from population growth or from customers who abandoned cable.
This year, Comcast, the nation’s largest cable provider, lost 2 percent, or about 600,000 customers from last year. Time Warner Cable, however, was up less than 1 percent, or 36,000 customers. Cox, which doesn’t break out numbers, reported no change in its overall 6.2 million residential and commercial customers in the past year.
Meanwhile, Verizon said FiOS added 1 million subscribers last year and AT&T’s U-verse is booming as well. As for satellite TV companies, DirecTV also added about 1 million subscribers last year but Dish Network lost 1.7 percent of its customers.
The one highlight for the paid-TV industry? The digital TV transition, which is forcing analog viewers who rely on free, over-the-air TV service to switch to digital technology by June 12.
“Some households were just tired of the whole thing and just signed up for cable and satellite,” Paxton said.
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They could try lowering prices, instead of raising them. Take a look around, everyone is lowering prices — except the cable companies.
Kind of hard for Cable to lower prices when the Network’s like ESPN keep upping there broadcast fees.
I just got off the phone with Cox about an hour ago to see (like some on this blog have suggested), they would lower my bill if I asked.
They would not – they tried to upsell me on adding sports and movie tiers (both of which I could care less about), and moving me to the unlimited long-distance plan, which would lower my bill about $3.00 a month for one year, but then would shoot up after that.
Can’t wait for Verizon to get to Mission Viejo!
Aww… I wonder if that’s a sign of what’s to come with Cox? Hopefully not. From past research though, cable reps do have some leeway to lower prices so you must be at the bottom limit. Here’s my earlier post on “How to get cheaper cable TV.”
You may be forced to switch to satellite, which I hear is offering some good deals in order to grow customers. Good luck.
Charter Communications recently came in last in customer service.
The quality of their HD service and Internet was so terrible that we had to cancel them and upgrade to Direct TV. DTV service quality and customer service is excellent at our home.
The cable company’s need to lower their prices. The taxes should be removed as well, or every one should have one flat fee.
Both satellite and cable promote the number of channels that they offer, counting even the 24-hour channels that they have for their own service. Once you carve out the junk home shopping channels, the foreign language channels, the duplicate channels (three channels of ‘world series of poker 2008″?), there really isn’t much left. And for nearly $100/month?
I’m real close to canceling everything.
And if it’s pay television, why are there so many commercials that we have to sit through?
Time Warner just increased my bill $10 in one month. It has gone up $15 in the past year. We called to negoiate a deal, but they said NO. Thinking of going to Satellite. Is Verizon in Anaheim? Does anyone know what DirectTV charges for basic cable?
FYI: DirecTV advertises a “basic” package with 50 channels + local channels for $29.99. Also, just spotted a “Memorial Day” sale on its web site if you call in — 888-777-2454
’500 channels and nothing on.’–
I ditched cable and satellite a couple of years ago and don’t miss it– at all.
I get enough content via my digital TV channel signals over the air and supplement my choices with internet offerings and NetFlix.
PBS (which I support) has great programming, I’m watching the Giro d’Italia on Universal Sports over the air and on the internet, catch some Hulu shows, and my comedy at the shows websites for the episodes after the initial cable showing (I’m OK with watching the following day). I don’t mind watching some ads on internet sites. I consider it a good trade off.
If you’re tired of shelling out $90+ a month, then ditch the cable and satellite. I mean really, how many channels do you really watch? If the cable providers offered ‘cafeteria pricing’ they might get me back, but I just don’t think the cable and satellite providers really offer value. And their customer service generally stinks.
Ditch the cable and satellite–
Save your money.
We cancelled cable 6-7 years ago (our kids were 4, 7, 9 and 12). We tried FiOS TV last year for a few months, but ditched that too. We watch videos (old and new) and the kids use hulu.com to supplement viewing. We don’t miss tv (network or cable as a whole) – most shows have no redeeming value. Cost was a small factor – the bigger influence was that most programming is junk and we don’t have the interest to plan our lives around a particular show being on.
Cox is the only “allowed” game in town in Mission Viejo so no free market competition here. I have the “package” of tv, internet and phone. I realized the “no value” of cable television years ago; I have the lowest possible rate, have only channels 2-13 + some 300 channels (soccer), though I do pay an upcharge to have HD TV for my big screen. If I like a TV series or special show, I buy it from iTunes for $23 for an entire season- much cheaper than paying a high monthly fee to have a lot of repeated movies and many channels of worthless programming all year — or for even the “season” of a favorite TV show. Cox has you ham-strung on the internet service and this is the fee that goes up regularly. $50 just to hook to the internet. The land line fees are very low, but who uses a land-line anymore? I no longer even answer my landline as it is all sales, telemarketers, etc (and yes, my number is on the “Do Not Call” registry). I’ve whittled my Cox bill to just under $100 per month for all three services. Normally the customer service is fairly good, but Cox declared war on me when it chose to tick off iPhone users. Their attitude when the phone was first released about utilizing remote email on the server was insane. Still no true access for outgoing- you have to you use A T & T’s “cwmx.com” as the outgoing setting. All iPhones in Orange County set up Gmail accounts just to be able to use remote email at all. If a provider enters the market that can offer the same services with stability (that won’t be Verizon), I’ll jump ship.
We don’t have cable at work but in December I got a convertor box coupon and got the new digital box from Radio Shack. Now, instead of channels 5,7,9,and sometimes 11, we get 3 channels of 5, 3 of channel 7, and a whole lot of channels we didn’t get before. Also has the ability to turn the tv on and off, has a channel guide, and a menu. Really nice!
Every year like clock work I am hit with a rate increase in January. Time Warner needs to place more importance on their clients and stop treating them like customers. Their service is much more expensive than dish network, and the quality is sub-par. For the price of Time Warner’s basic service, I am able to have much more with Dish.
Since I cover this, I should point out that pretty much every TV service raised prices this year. Here are my past reports about them:
* Time Warner Cable, up $1 to $5/month
* Cox Cable, undetermined
* DirecTV, up $3/month
* AT&T U-verse, up 11-50% month
In the heart of OC the cable company has horrible customer service, so much so that I refuse to sign up for service. Here’s why: a friend is deployed in Afghanistan and needed someone to take her cable modem and converter box back. No problem with that however there was an outstanding balance made up of the disconnect fee. This was that occurred outside of the billing cycle and was due. I asked what the total charges were and said I would pay them on behalf of my friend. That request resulted in them telling me that I could not pay this on her behalf, that if it wasn’t paid by her it would go to collections and that they couldn’t talk to me about the bill. I replied that the service member was overseas, no family was here to contact and that I was willing to pay the bill if they’d tell me what it was. Their reply was priceless and this is a quote “She needs to call us at this number (while pointing to the number on a piece of paper) and talk to us.” It was a manager who said it and that was the last time I ever will deal with Cox.
We were one of those folks that moved from cable (Cox) to satellite (DirectTV) last year. For us it wasn’t a price issue. It was customer service. We had sporadic problems with reception for a few months. Each time a technician came to our house they blamed something else. Half the time, the new tech would undo something the previous tech had done. Bottom line – the problem was never resolved. We fnally got so fed up we called DirecTV. They showed up when promised and did the work primsed (and then some). If someone is paying $100 per month plus, they should be taken care of when they have a problem!
They’re all greedy!!! stupid Cable company. Forget about Time Warner, they raise the price for nothing. That’s why I never come back to them.
Did you take into account that maybe people are dropping cable because they can’t afford it anymore? With the number of people who have lost jobs, spending on non essential items like Cable TV is probably one of the first things to go. They not jumping ship for other providers, they’ve just jumped ship, period.
Yes, but I don’t think that’s happening. While I’m sure there are some people who have dropped paid TV, none of the folks I kow who lost their jobs have dropped cable, although some might have downsized their options. And then there’s this report.
I was a Time Warner customer for years, but my friend told me of a better deal he was getting with Dish. I switched over and found out I could get the same channels, 20 movie channels and even NFL network for $25 less a month than Time Warner. When I called to cancel my service the TW rep practically yelled at me basically treated me like an ignorant person. When that didnt work, he offered me a deal to save me $20/month for 3 months. I asked him if he knew math, that a savings of $25/month FOREVER was more than $20/month for 3 months. Then I thanked him for making my decision easier.
I disagree that we won’t see people give up cable in our lifetimes. That’s a ridiculous prediction. I think it’s more likely that very soon cable will be bleeding much more than 1,000,000 customers a year. As soon as people realize they have more and better options and as soon as internet TV takes hold more, poof, cable companies will be gone. They are a dinosaur.
We ditched our cable late last year and have never looked back. Bought a $15 antennae at Best Buy and we receive crystal clear over the air broadcasts of about 20 – 25 channels (how many of those cable channels do you watch anyway?) for FREE! We watch a couple of series we follow on Hulu (computer connected to the TV) and we have an Apple TV for renting movies.
Including our internet connection fee and the movies we rent from Apple TV, we spend about $45 a month watching TV. As opposed to the $112 we used to spend for cable + taxes.
I’ll never go back to cable.
Agreed, but I haven’t done the research to back that up. Beyond Hulu & friends gaining momentum (unless big networks decide to put the kibosh on the free for all), I suspect others will drop paid TV service because they have no time to watch it, like me although I haven’t canceled cable yet. Anyone see this related story? Number of babies born in the US in 2007 outpaces Baby Boomer era.”
Hulu is owned by the networks, so that’s doubtful they’d but the kibosh on it. What does the network care about cable? Nothing. They still sell advertising on Hulu.com. I have to watch adverts on Hulu.com or cable, so what’s the difference? The difference is Hulu is free.
Based on the responses here and elsewhere on the internet, I think you and the cable companies would be surprised by how many people are ditching paid TV service all together for free options or pay per view options like NetFlix and Apple TV.
It reminds me of when the phone companies said that people would never ditch their landlines in the next 25 years. Haha. What was the last report I heard? Something like cell phone only households will be the majority in only a few short years? Something like that.
If the cable companies don’t adapt and adapt fast, they will be extinct sooner than you or the cable companies or the research analysts think.
Hey, Nick, I agree with you. I ditched my landline six years ago and have thought about downsizing my cable (I can’t give up that extreme broadband though). I hope services like Hulu will be here to stay. But a recent LA Times story wonders about the future of free: “Hulu’s tug of war with TV.”
When we had cox it was terrible so we switched to Direct but between the wind and the trees the signal would disappear. Then the price increases came and they never stopped. The commericals were more frequent and longer, you were paying to watch more commericals. 18 months ago we stopped Direct and went to broadcast because the internet is used more that TV. With a digital coverter box and the additional channels for free there is no comparison to cable or dish.
I dropped Dish for online viewing instead a month ago. Plus we use an antanae for Digital. Glad to stop wasting money on shows I don’t even watch. There are no restrictions online you watch what you want when you want it. Give it a try.
I like: hulu.com
channelsurfing.com
If I have to pay these high rates for Totally Worthless Crap then I want to pick the channels.
Not the Spanish, Religious, Exercise, Kids and Home Shopping channels which I never watch
I would disagree with the cable is forever concept. Just as previous technologies were de-thronged by new sciences, cable industry will be replaced by newer more reliable automated and resilient technology to come.
Who is this cable “pundit” Paxton guy? Is he getting funds for these studies from the cable industry? It is arrogant to even predict the future of electronic and computer science’s futures. Just as much the cellular phones replaced land lines, cable TV will be replaced by fiber, cellular and other technologies yet to be implemented. Case and point; there were discussions of installing antennas on major hi-rise buildings (US Gov. was to give tax credits to the property owner/s) that would supplement existing wireless networks to expand Wi-Fi capabilities to the general public. In most cases the fee to get online would be either a few cents or free. This concept may be farfetched to some but it is been in effect at local malls, Starbucks, coffee shops and other establishments.
So, when this Paxton character is predicting that the cable is “Not going to go away at least in our lifetime” or “Cable industry is going to be a market leader for at least a decade” etc., I have assume he is either 80 or 90 years old and out of touch with the reality.
Bottom line: US consumer will put up with cable companies and their bad customer services perhaps for now. Mark my words, the moment another newer technology comes by, they will drop cable just like they have done to, so called market leaders of antiquated technologies in the past.
that’s what happens when you price gouge. Customers are finally seeming to matter again during this economic downturn.
Just bootleg the shows off the file sharing sites. No need to buy premium channels.
Time Warner, North Orange County. High speed internet,basic cable for 75.00 month. Reception for tv is a 7 out of 10.
I’m dropping Cox Cable not because we can’t afford it but because there is no value in it. Instead, I’m catching all my shows on Hulu and use Netflix Watch Instantly, all on my computer which can be hooked up to my tv. Not all tv shows are on hulu, but enough are for the time I have to watch tv. Why pay for something when it is free elsewhere? I’ll be saving about $100 a month.
My wife and I needed to cutback due to a loss of income and Cox was amongst the first to go. It’s amazing how much of the TV content can be found online if you look hard enough. The funny thing is, when we went to the Cox office to return our box there were 12 others that came in with their boxes by the time we finished our business. I am amongst those that say cable will be history quicker than most people think. Soon enough, all content will be broadcast from websites at the source and filtered directly to your TV – your TV and computer will be one. If you want to watch Letterman you’ll tune in to the CBS website and pay a small viewing fee – cut out the middle man and pay for what you watch – when you want to watch it.