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Cable Technology Feature Article

November 08, 2011

Cable Subscribers are Cutting the Cord with Comcast

By Jerry Olsen, Contributing Writer

In its third quarter earnings report, Comcast informed its investors that the company lost over 165,000 cable subscribers between the months of July through September of 2011.

According to the company, the average Comcast (News - Alert) cable subscriber spent approximately $138.58 per month during the third quarter or a little over $1,650 a year.

The good news for Comcast however, is that the company saw an increase of about 261,000 high-speed Internet subscribers during the same time period. This brings the amount of Comcast high-speed Internet subscribers to just less than 18 million while video customers have fallen to just over 22 million.

One of the main reasons why consumers are dropping cable is that the combined cost of Hulu (News - Alert) Plus, Netflix, and Amazon Prime Instant

With the combined cost of Hulu Plus, Netflix and Amazon Prime Instant Videos for a little over $270 a year, it’s clear that some consumers are moving away from cable due to financial constraints and the bad economy.

Although cable subscribers still comprise the most profitable portion of Comcast business, more of these people are replacing their current cable service with other options like over-the-air channels and set-top boxes (for example, the Roku).

While video subscribers have decreased, the rate of decline has fallen since the previous year. It’s seems that a large portion of the cable subscribers picked up Comcast high-speed service in order to access online video sources.

During the third quarter of 2010, Comcast lost about 275,000 cable subscribers. Overall, the company posted a profit during the third quarter from a combination of cable, high-speed Internet and voice sales.

According to one of by Time Warner (News - Alert), one of Comcast’s biggest rivals, the rival to Comcast believes that the majority of consumers that cancel service are doing so for financial reasons rather than moving to online video sources.

By comparison, Time Warner lost about 128,000 video subscribers in the third quarter of 2011 and gained about 90,000 high-speed Internet subscribers as well.

It’s also possible that consumers have started to split services between companies.

For instance, some people use DirecTV (News - Alert) in order to provide satellite access throughout their homes, and then sign up with Time Warner, Comcast, or another cable company for high-speed Internet in order to save money.

Edited by Jennifer Russell