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Cable Technology Feature Article

November 15, 2010

Consumers Cutting the Cord on Pay TV and Cell Service

By Susan J. Campbell, TMCnet Contributing Editor

It is always a good idea to save money; but in an economic recovery, penny pinching delays the revival of the market. For cable TV and cell phone service providers, the “cutting back” is getting very close to home.

According to a recent Yahoo Tech blog, more and more Americans are cutting back on such services in an effort to trim the budget.

A recent survey by Harris Interactive (News - Alert) shows that 22 percent of consumers have either scaled back their cable service or canceled it completely over the last six months. An additional 21 percent appear to be giving the move some serious thought.

The survey also found that roughly 17 percent of consumers tweaked or chopped their cell phone service. Another 17 percent kept their cell phones, but eliminated their landlines altogether.

Most of the consumers changing or canceling their cable service – 28 percent – are Gen X’ers, those between the ages of 34 and 45. This group also leads the way when it comes to cutting their cell phone plans.

Another 21 percent of the Gen X population also told Harris researchers that they had either changed or nixed their wireless service in the last six months.

Even with this push in this sector, the “echo boomers,” the 18- to 33-year old crowd chopped their landlines at the same rate – a solid 22 percent.

The findings from Harris emerge on the heels of grim quarterly results from the big cable companies, all of which lost hundreds of thousands of subscribers in the last quarter.

Pay TV executives point to the poor economy as the reason for deflecting subscribers, instead of acknowledging the threat presented by free programming over the Internet.

On the flip side, even with stark numbers from the Harris report, the number of cell phone subscribers continues to climb in the U.S. This suggests that those participating in the survey simply cut some of their plan features instead of eliminating them altogether.

The fact that an increasing number of Americans are ditching their landlines is no surprise. In fact, according to the National Center for Health Statistics, nearly one in four U.S. households have gone all mobile, all the time.

The Harris research covered more than just cell phone and cable services in its report, and it would be interesting to know what consumers value more over Pay TV or all-inclusive cell plans. Is this a trend that will continue? It’s likely and providers may want to think of other ways to attract and service customers in order to survive.

Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.

Edited by Tammy Wolf