I argued recently that cable TV faces the same extinction threat as the hard-wired telephone, as consumers show less interest in watching shows on a television in favor of DVDs, iPads and other internet video streaming sources.
My argument caused some controversy, which I'll address with the two charts below.
On Feb. 28, I pulled a chart from an ISI analyst's note that showed a loss of 2.3 million cable TV subscribers since the beginning of 2010. The hurting companies included Time Warner Cable and Dish.
I got some heated feedback from that, after some people pointed out that I underplayed the fact that when you add in video subscriber gains from satellite TV and telcos like Verizon the actual number of subscribers paying for delivery of video has risen in the last two years.
Fair enough: It's true that the total universe of subscribers is growing slightly. But when you separate out the cable TV video subscribers from the people buying satellite TV or broadband video service from a telco, then a stark divergence emerges between the fate of cable TV and broadband service generally: Cable TV is in decline, whereas satellite and telco video provision is growing.
Cable is a declining priority for consumers
In my opinion, what this means is that cable TV is a declining priority for people subscribing to broadband service. More people are buying "triple-play" bundles of web, TV and phone service. In that bundle, web access is probably their No. 1 priority. (Imagine how quickly you'd go crazy if you didn't have the internet at home!)
Cable is becoming like telephone service in a triple-play bundle: That vestigial thing you buy only because it's cheaply priced and you still use it occasionally. Web access—and your ability to watch the shows when you want—is the key.
First, here is the quarterly breakdown of new video subscription gains over the last two years, prepared by One Touch Intelligence, a media research company. The numbers are broken down so you can see which industries are succeeding and which are not.
Cable TV video subscribers, who comprise the biggest sector, have only declined. There has been a net loss of 3.5 million cable video subscribers in the last two years.
Satellite has held steady. The telcos have made healthy gains, probably because of their broadband web access offers:
Now here's the total universe of all subscribers. There have been gains, but the gains have weakened over time:
Bottom line: I'm sticking to my argument that watching TV, as we know it, is dying.
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