Is Cord Cutting Really Happening?

Cord CutterMost of the big cable companies have released their quarterly earnings reports, which include data pertaining to the number of TV subscribers they’ve added or lost.  NewTeeVee reports that across the board, the cable companies cumulatively lost more than 500,000 TV subscribers in the 3rd quarter of 2010, adding to more than 700,000 losses from the 2nd quarter.  And although these losses are typically explained away by cable companies as signs of a weak economy or increased competition from new players in the market like Verizon or AT&T, the trend clearly highlights cracks in cable’s once rock solid and expanding customer base.

It’s not hard to grasp why consumers are seeking alternatives to traditional television content now more than ever.  The Internet, mobile devices, and social networking all offer consumers new forms of passive entertainment, displacing them from their seats in front of the TV.  The justification to pay for hundreds of channels that nobody watches, especially when free or tremendously discounted alternatives exist, is hard to bolster in families looking to trim that fat from tightly stretched budgets.

Despite the cable company losses, it’s not clear what services or technologies are siphoning these customers.  Recent alternative content delivery and aggregation products like Apple TV and Google TV have failed to offer a compelling enough solution to capture mass market appeal as a replacement for rather than supplement to traditional means of content delivery.  But with Apple having sold 250,000 devices since its release and Roku sales likely nearing a million devices or more, the consumer’s willingness to explore these alternative content delivery methods is a clear indication of a brewing revolt.

But that revolt isn’t happening yet.  The loss of a few hundred thousand customers from the pool of millions to which cable operators cater can’t be explained away via singular reasoning.  The user experience and content availability of cable alternatives is still quite poor – which precludes some great migration away from the boatloads of content monopolized by “big cable”.  Cord cutting is still in the realm of the hobbiest.  And unless companies like Google and Apple can quickly create a content-rich, well implemented and compelling alternative to the country’s existing cable TV model, cable companies will take small incremental steps to recapture and retain customers with advanced features and devices that mimic the efforts of these other advanced devices.

It’s a race to the future…

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