Cord Cutting 2.0 In Trend in Ditching Your Cable Bill
Planning on cutting the cord and go completely pay TV free?
The days of cable and satellite TV subscriptions are over as cord cutting has officially gone mainstream, with figures showing a slight decline in overall pay-TV subscribers in the second quarter of this year.
Not anymore strictly held in reserve by early adopters and the extremely tech savvy, there is now an increasing number of average Americans that are now ditching their cable and satellite TV subscriptions, both figuratively and literally “cutting” the cord as their in-home video viewing preference has shifted to new, low-cost streaming and video-on-demand alternatives.
In fact, it was reported recently by The Wall Street Journal that there is actually a rush in those shifting away from pay TV services, with a reported combined net loss of as many as 400,000 total video subscribers in the second quarter of 2012 from both publicly traded and private cable, satellite and phone companies, which is up from 340,000 net defections in the second quarter of 2011.
Of this, a net loss of about 200,000 subscribers in the quarter had come from publicly traded cable, satellite and phone companies, with reported earnings showing about 0.2% of the roughly 100 million pay-TV subscribers.
Overall, according to Nielsen, there is a drop of about 1.5% or 1.5 million in the number of U.S. households subscribing to pay TV services in 2011.
This quarterly subscriber decline, which has never happened in the history of the pay TV industry until 2010, is said to be due to viewers given options.
For the first time, several choices now await viewers in terms of their in-home video entertainment. And not all of them are tied to the traditional pay TV model, a fact that many broadcasters aren’t exactly thrilled about.
Internet-based streaming services are now abounding, from on-demand downloads, over-the-air HD to a large range of other new cable alternatives. But for viewers, the selling points are simple, its greater variety in programming, and, in cases of those who had also cut out their cable bill, savings total to as much as $200 per month.
If this decline in the number of people subscribing to pay TV is sustained, this could have ramifications for pay-TV operators and for TV channels, as most of them share in the fees paid by subscribers. Big entertainment companies tend to generate much of their profits from subscription fees paid to TV channels.
With this decline, it is said that it would likely intensify the most intense debate in television today, which is whether or not the lure of Netflix and YouTube is causing viewers to disconnect their cable-TV service.
However, the second-quarter numbers won’t conclusively settle the argument. This is because the April-through-June quarter is traditionally a weak period for pay-TV operators, with college students disconnecting their service, typically returning in the fall, companies say.
Last year, and in 2010, the pay-TV industry had been able to make up for declines in the second and third quarters, showing gains in the first and fourth quarters. Both years had posted net growth of about 200,000 subscribers.
Source: FINANCE YAHOO