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Cable Technology Feature Article

August 10, 2011

Record Number of US Subscribers Giving Up Cable, Satellite TV

By Ed Silverstein, TMCnet Contributor

American TV viewers are giving up cable and satellite TV subscriptions in record numbers, says a new analysis.

According to The Associated Press – which reviewed the companies' quarterly earnings – the drop may be linked with high unemployment and many people living with their parents. Thus, only one cable bill exists per household, The AP explains.

The AP also speculates consumers are canceling cable, or never signing up, because they're watching less-expensive Internet video.

“If that's the case, viewers can expect more restrictions on online video, as TV companies and Hollywood studios try to make sure that they get paid for what they produce,” The AP said.

The AP also found that eight of the nine largest U.S. subscription-TV providers lost 195,700 subscribers during the latest quarter. The providers include four of the five biggest cable companies and phone companies such as Verizon (News - Alert) Communications and AT&T, and satellite broadcasters DirecTV Group and Dish Network Corp.

For example, TMCnet reported that the number of subscribers for Dish Network saw a net loss of 135,000 during the second quarter.

The news follows last year, when U.S. subscription-TV overall had a small net loss of subscribers.

In an interview, Sanford Bernstein analyst Craig Moffett told The AP the subscription-TV industry, including the untallied cable companies, lost 380,000 subscribers in the latest quarter. His estimate represents about one out of every 300 U.S. households.

In contrast, Ian Olgeirson, an analyst at SNL Kagan, said there were some 425,000 to 450,000 subscribers lost during the latest quarter.

But the providers remain confident. For instance, Glenn Britt, CEO of Time Warner (News - Alert) Cable, said the impact of Internet video on the number of cable TV subscribers is "very, very modest,” The AP said.

The Nielsen Co. said Americans who watch the most online video watch less TV, according to a report released in June.

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Ed Silverstein is a TMCnet contributor. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf