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How cable companies offset cord cutters by squeezing more money from Internet customers

Published May 23rd, 2013 5:45PM EDT
Cable Industry Profits Analysis

Yes, the major cable companies are losing paid television subscribers and yes, they have stunningly low customer satisfaction ratings. But as The Atlantic’s Derek Thompson ably explains, they aren’t going anywhere because they’re still making money hand over fist providing home broadband connections to tens of millions of households. Essentially, cable companies have been losing TV subscribers since the 1990s but have more than made up for this lost revenue by increasing their total number of Internet subscribers and squeezing more monthly revenue out customers “both by charging more for television and by getting households to buy more than just TV,” Thompson writes.

Essentially, then, cable companies seem destined to stay part of the American landscape unless another company can successfully disrupt their Internet service business. With high barriers to entry for Internet service providers, this likely means that only a company with deep pockets such as Google can successfully pull off such a feat.

Prior to joining BGR as News Editor, Brad Reed spent five years covering the wireless industry for Network World. His first smartphone was a BlackBerry but he has since become a loyal Android user.