Pay TV is getting worried about cord cutters

October 10, 2014 9:06 am No Comments 0

cord shaving increases

Ask (almost) any service provider what worries them most about the pay-TV industry and cord shaving likely will be in their Top 5.

With good reason.

The Wall Street Journal, with help from Nielsen, this morning is reporting that the Top 40 cable networks have seen subscriber numbers fall at least 3% over the past four years, despite an increase in population and households in the U.S.

ESPN is in 95.2 million households, down more than 4.5%; TNT, which has 95.9 million households, has declined 4.5%, Nickelodeon, TBS, HLN, Weather Channel, Discovery, CNN, and the USA Network all have lost more than 3% of their audience.

Overall, said the report, the Top 40 cable nets have lost an average of 3.2 million households in four years, outpacing the declines in actual pay-TV subscriptions in the U.S.

While some of the loss can be attributed to cord cutting – the industry lost 166,000 subscribers last year, it’s not likely Netflix and Hulu are to blame.

It’s economics.

The number of basic cable subscribers – trimmed down versions of the standard cable package – has increased to 12% from 8% just a few years ago.

“What we are seeing is some cord cutting and some cord shaving,” said Stephen Hasker, global president of Nielsen. “Consumer time and attention is shifting.”

TV execs say they’ve more than made up for subscriber attrition with higher retransmission fees, so they’re not too worried. But how long will that last?

Increasingly, consumers are looking over the top for their secondary (and in some cases, primary) video entertainment.

“We’re at a tipping point of consumers thinking Internet first and TV second,” Bryan Rader, CEO of Bandwidth Consulting LLC, a firm that advises investors about pay-TV marketing trends, told the Journal.

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Categories: Pay TVTags: pay tvcord shavingnetflix