Cord cutting is a real trend and it’s only accelerating. If you still need more evidence for this, look at a new Strategy Analytics study showing that in the most recent quarter “total subscribers among the tracked [pay TV] operators declined at the highest rate we have seen so far.” Samuel W. Bennett has posted a chart that nicely shows how cable TV subscriptions have been steadily declining as Netflix subscriptions have been rising at a significantly faster rate.
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So that settles it: Netflix is the future and companies like Comcast are relics, right? Not at all.
While the future of TV is online on-demand streaming over the web, you need to have high-speed, high-capacity networks capable of handling all that video traffic. And an FCC report from earlier this year found Comcast and Time Warner Cable combined account for 57% of all Internet connections with speeds of 25Mbps or greater in the United States.
So if cable companies are losing revenue from their pay TV services, they have a simple solution to make up for that lost money: Jack up prices. This is particularly easy to do in markets where cable companies face no competition for broadband customers, which is a tragically common reality in much of the United States.
And make no mistake: This is an industry that has no qualms about raising prices. From Strategy Analytics’ report, look at how the average revenue per video subscriber has continued to climb even as the number of total subscribers has gone down:
So while online streaming has freed us from having to subscribe to pricey cable bundles, it hasn’t yet freed us from the cable companies. And there’s no way it will do so until there’s more competition for broadband services in the U.S.
