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Cord Cutting Is Real and It’s Killing Cable

In the past, the Pay TV  industry attempted to push the media narrative that “cord cutting” isn’t really a thing to worry about. They have pretended that “cutting the cord” (a.k.a cancelling their pay TV subscription) it’s a passing fad that will eventually just go away.

However, anyone objectively looking at Neilsen data can see that people are still leaving cable TV in droves.  According to their “Total Audience Report for Q1 2016” which you can download here, over 17.2 million households used broadcast TV and/or broadband  watch TV without having a cable or satellite TV subscription in the first quarter of 2016.

By comparison, in the first quarter of 2015 that number was 15.6 million households. That means the number of households that watch TV without cable increased by 1.6 million in just 1 year.

Now any cable TV executive would probably spin some tale about how most of those households were Millennials who never used cable or some other  rubbish to put advertisers’ minds at ease. However,  a deeper look into the numbers in the report show the decline of households with cable or satellite declined by nearly 1.6 million over that same time.  That’s a lot of customers to lose in a single year.

Of the 17.2 million without a Pay TV subscription, 3.9 million had broadband only, 7.3 million had a combination of broadband and over the air (OTA) TV, while 6 million only used broadcast OTA.

Is Mainstream Media on The Take?

Judging by the number of “news” articles trashing cord cutting I’ve seen lately, it seems that the Pay TV industry is finally starting to worry about this trend. It’s quite obvious that these articles are attempting to push a narrative.  Take this New York Times piece. The author calls the article “The Downside of Cord-Cutting”, but only examines Sling TV and Playstation Vue.

The author fails to even consider TV antennas, or the numerous other ways to watch TV wihtout cable. He simply examines 2 live streaming services and concludes cable is better. It’s a travesty of journalism, and shocking considering it appeared in the New York Times.

Luke at Cordcutternews.com had a great post rebutting the claims of the New York Times hit piece. The biggest of which being that cord cutters want something similar cable TV.  While some are looking for an exact replica, many think the whole cable model stinks and are looking for content   a la cart,  on-demand, and without a contract commitment,. Those qualities are the core to most cord cutting solutions.

The Times piece isn’t the only recent  cord cutting hatchet job. Back in May, Evan Horowitz wrote an article completely detached from reality for the Boston Globe. He went as far to call the 17.2 million cord cutters “mythical.”  He goes on to conclude that little savings can come from cord cutting because the price of internet access isn’t that much different than the price of a TV bundle.

He was unfortunately derelict in his journalistic duties, failing to account for the myriad a fees that come along with the advertised promo price of the Pay TV bundle. He also assumes you need 75 Mbps to cut the cord, which is ludicrous considering cable quality HD video can stream at about 5 Mbps.  He doesn’t even attempt to lead The Globe’s readers even close to the truth when he goes on to mention:

Opting for slower Internet can bring the cost down to $40 or $45 per month, but with uncertain consequences for your ability to stream video to multiple devices.

In essence, he is using fear of the unknown to convince his readers to stay with Cable TV.  If they only knew that they could get free HD broadcast TV with an antenna, and cherry pick the shows they want to watch on cable through Amazon or iTunes.

Pay TV is in Trouble

I’m not sure what’s behind the recent increase in poorly conceived cable TV cheerleading pieces showing up in what are otherwise respected news outlets. My hunch is 17.2 million households without a Pay TV subscription may have something to do with it. As people wake up to the fact that an internet only plan, a TV antenna, and a streaming service is much cheaper than the hidden price of their bundle the number of people that drop pay-TV will only increase.

I suspect that we are yet to see the real flood of Pay TV consumers cut the cord. Many are still hesitant to cut due to the expense of their internet vs the Pay TV advertised bundle price.  While I have shown in the past that these deals are a bait and switch, they still do a good job of tricking many into staying with their pay TV provider. Once a company outside of Pay-TV starts delivering affordable internet to U.S. citizens, the real deluge begins for this outdated industry.

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Categories: Tech News
Dennis Restauro :Dennis is the founder of Grounded Reason. He also hosts the Grounded Reason Podcast. Follow him on Twitter: Follow Dennis on Twitter

View Comments (20)

  • I finally cancelled mine today, and I had to tell the guy 9 times that I wanted to cancel before he would start the process. Offered all sorts of deals to keep me and then once he started to actually cancel, he thought I might want to put cable "on hold" so I could just call to get it back and not pay an installation fee. Not likely!

  • Our regional provider is an example of how some cable companies are reacting to this trend. It recently changed its name from Buckeye CableVision to Buckeye Broadband. Its marketing is now all about high speed internet packages to allow multi-device streaming. Of course, TV subscriptions are still available, but the trend is clear.

  • Good article Dennis. The bundle plans are indeed 'bait and switch' -- no doubt about that. We recently cut the cord and are very happy with our decision. We get Sling TV mainly to watch CNN when some big news breaks out. My wife watches You Tube videos pertaining to her hobbies and likes that better than anything cable has to offer.

    • The quality of shows on Youtube has really increased in recent years. It's become a great source of content.

  • I cut the cable in May because I was tired of paying $90/month (which is much cheaper than some in my family pay) to Dish Network for one of their "America's Top" packages, only to find significant amounts of 24/7 infomercials, horrible reality programming, and that the channels having non-garbage content were in higher tier packages: Essentially $90/month for content I neither liked nor watched. 75% of the programs I watch regularly are available on their host channel's web page, or via a low cost Netflix subscription. The hardware to cut the cable was about $180: PC tuner card, an antenna, roll of coax, some tools. Free software turned a PC into a DVR, which is working well for OTA channels.

  • Let me add to your article. I just cancelled my cable tv-I had been a very long time subscriber but Cox decided to go all digital and if you had only one box you now had to have a mini box for every tv and recording device. In addition the tv times out after six hours unless you hit the remote. Cox drove me away and I'm excited to try the streaming services. I have purchased Mohu antennas and will try the streaming to see which works best- BTW getting rid of Cox TV saves me $115/month.
    Cox apparently is getting their business plan from the airline industry!

  • Cord-cutting has saved us a ton. We paid $110 per month for DirecTV. Now, with an antenna, TiVo, FireTV, Roku, along with Netflix, Hulu, Amazon Prime, and a host of free streaming services, our family gets MORE of what we want for only about $35 per month. The kids don't care as they watch everything on-demand, but my wife still gets her live TV, a program guide, and a DVR to record things we don't get on the streaming services. The equipment costs were recouped in six months of savings. We have never factored in the cost of internet into our TV bill because, these days, internet access has become more of a utility than a luxury. We would have it in our home regardless of whether or not we used it to stream content to our televisions.

  • My main concern in all of this is that for people like me, who only have (1) choice for TV/ phone/internet, will see huge jumps in internet pricing to make up for the loss in cable revenues (we haven't had a landline in years). I thought I learned way back in grade school that having only (1) choice for something was called a "monopoly".

    • What I am hoping for (maybe a pipe dream??) is for more competition in Internet Service Providers, or even perhaps some Gov't intervention in the pricing. That is probably a pipe dream too!

      • Something needs to happen. I'm hoping start-ups like Starry will be able to soon make it a bit cheaper to access the internet.

  • The big bait and switch is the $49 per month for 2 years. I asked direct TV what will be the charge afterward, $80 per month. I pay around $140 per month for internet($59) and cable TV($80) thru Time Warner Cable. I'm always fighting with those people on cost increases. The cable quality isn't that good due to the loaded bandwidth of their system. I bought an antenna and mounted it around 30 ft in the air. I can received in upwards of 30 FREE channels of very good quality TV. We were amazed at the quality. It was much clearer that the current cable. Previously, I've had TWC make a service call on snowy and buzz line on some of the channels. "Oh its your connectors and you'll have to replace all of them". Same connectors, new antenna, great quality on all the channels, HA. I live in west central Ohio. I can get stations from places like Lima, Ft. Wayne, Dayton and Bowling Green and Columbus. On good days even Indianapolis. I got a Roku box as a birthday gift so TWC, BYE BYE and good riddens to bad rubbish!

  • Follow up to my Cord Cutting (from Dish) two months ago:
    Unexpected PLEASANT consequence to the antenna's FREE TV: Hundreds of good old real TV shows that we used to love are still being broadcast!!!!!!
    WHO KNEW??? We have watched Johnny Carson, NYPD Blue, Miami Vice, Seinfeld, The Equalizer, and many, many more shows that we had forgotten existed. PLUS hundreds of terrific old movies!!! Thanks to Roamio, many are available at my touch.
    As for the streaming part: The only problem with the streaming service is the necessity to use two controllers, and the lack of the ability to "channel surf." Using P. S. Vue and Amazon Prime; saving about $75 per month now since Dish tried to raise price to $115.
    Just do it if you can get any reception at all from an antenna. You will not be sorry!

    • Thats awesome!! It's exactly how we felt. Once we made the leap the only regret we had was not doing it sooner.

  • Note that today TWC bought into Hulu. TWC knows they will continue to lose cable subscribers.

    I cut my cord last month. Comcast person was ok. She noted that I was with them for 22 years and asked if she could talk me out of cancelling. I said no. She then just calculated by credit of $55. I took the Comcast equipment back last week and today got a check for the $55 today.
    I'm in zip 06089 in CT and am using a Wingard Freevison $35 at Home Depot.
    I used SlingTV's 7 day free trial to see Portugal France "football" and will probably signup for that in November through March to see some college football and basketball including UCONN women!!
    I am enjoying your site here and a subscriber. Thanks for telling me about getting NFL via my Verizon cell but really not needed cuz I'm a homebody and the Patriots are on local OTA channels almost all the time I think.

    • It's good to see "Old TV" hedging their bets a bit. We really need some startups disrupting their stranglehold on internet access. I'm glad Comcast didn't give you a hard time. Maybe they finally started cleaning up their customer service. Thanks for reading the blog and subscribing. Let us all know how it goes!

  • We would like to get off cable but we're older and not tech Davy and don't know if we'd know how to use the other stuff. We have Netflix now

    • Peggy, if you can operate Netflix you can do any of the others. Get an antenna and cut the cable! You will never regret it. And if by chance you ever did, the cable company would be glad to take you back so nothing lost.

  • I have never left a post on a blog before but I have to tell you guys my story.

    I had cox tv and internet. I was paying 170 a month. A year after I subscribed to cox tv, I had cox Internet and dish before. My bill went up to about 220 dollars. Needless to say I was astonished. I immediately looked into coRd cutting and it has been one of the best financial as well as entertainment desicions I have ever made. I have a playstation 4 and went with playstation vue. Since I've had it it has only gotten better. It just added nfl network to its channel options. I use antenna for my locals. But I'm hoping within a year or so they will have locals in my area.

    My cable Internet costs approximately 60 dollars a month and I have the 45 dollar package on ps vue. I am saving over 100 dollars a month and that is with Netflix as well.

    Best part of ps vue is that it has basically unlimited DVR storage because it does not store any data on any device. All you do is add the show you want to "my shows" and you can stream the episode of show you want for up to 30 days. This also cuts the need for hulu!

    Ps vue has apps for roku, chromecast, and amazon.

    Guys I am soooo impressed with this app you have no idea.

    Anyway I recommend ps vue very highly. And lay waste to thesee cable nazis!

  • All I have is internet, a Tablet & a Roku box. Got rid of Cable about 10 yrs ago. If I can't find something on Roku, I can download the show or movie on "Certain" sites. Streaming is here to stay.