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Cable Technology Feature Article

April 09, 2012

Reports Estimate Over One Million People Abandoned Cable in 2011

By Steve Anderson, Contributing TMCnet Writer

The doctrine of "cable cutting," also known by several other names, has at its root one key point: leave cable television in favor of the growing array of streaming offerings on the Web. Whatever name used to refer to it, it seems that the movement is taking hold, leaving consumers voting with their wallets and abandoning cable television in increasing numbers. Current estimates suggest that around 1.05 million pay-television customers became former pay-television customers in just 2011 alone.

The numbers are steadily increasing; research suggests that, since 2008, around 2.65 million such subscribers have become past-tense subscribers. And while previously the numbers were discounted as families and individuals seeking to weed out extra expenses in the midst of a bad economy -- the so-called "latte factor" -- the correlating increase in users of Netflix, Hulu (News - Alert) Plus and the like, as well as the drop in over the air network viewership, have pointed to a central theme: that at least some of these former pay-television customers are instead turning to online sources.

The numbers are still, however, comparatively small overall. Some estimates figure that by the end of 2012, the cable-cutter contingent will number about 3.58 million strong, or about 3.6 percent of pay-television subscribers. And pay-television services are seeing some upticks in the process; even as cable-cutter ranks swell, services like Verizon's FIOS and AT&T U-verse are expected to add an extra 185,000 subscribers to their ranks, up from 112,000 extra last year.

Indeed, the polarization is becoming more pronounced. With some users simply tired of the quality of pay-television offerings, others disgruntled over the lack of choice and others still stung by the paradox that, while they're paying to watch television, they're also paying by being forced to watch advertising during the shows themselves, it's not surprising to see some defections going on. And indeed, there are some who are likely drawn to lower prices -- including no charge at all in some cases -- so these numbers are likely to continue. Pay-television sources are visibly fighting back, however, with increased offerings and studios are tightening access to new content, which streaming sources depend on to operate.

The end results of this won't be seen for some time to come, but the home entertainment landscape is one that's in a state of constant flux. Just where it ends up remains to be seen, but it should be something to see when it gets there.

Edited by Rich Steeves

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