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Cable Technology Feature Article

August 03, 2012

Americans are Increasingly Ditching Pay Television Service

By Tracey E. Schelmetic, TMCnet Contributor

Americans are cutting the budget like never before. Economizing is the new word of the decade, and its pay television that may be feeling the brunt. By some estimates, more than 400,000 American households have dropped cable and satellite pay-TV services since the beginning of 2012.

The nation's largest pay-television services have been bleeding customers this year: 169,000 subscribers got rid of Time Warner (News - Alert) Cable services in the last quarter alone, which has led to the service provider’s 10th consecutive quarter of customer losses. About 52,000 net subscribers have dropped DirecTV (News - Alert) during the past quarter, and Comcast shed about 176,000 customers, reports said this week.

“Basic video subscriber losses aren't getting better,” Bernstein Research analyst Craig Moffett of Time Warner Cable said. He said in a client note that the company had done alright overall but “it is hard to shake the perception of an opportunity lost.”

Reuters (News - Alert) is blaming a number of factors for the cuts, including high unemployment rates, a weak housing market and regular programming factors as key contributing factors for the exodus. However, the news agency is also citing other reasons, including the increasing amount of Web-based content such as Netflix and Amazon streaming, plus the high (and continually escalating) costs of cable and satellite-based TV service.

The trend isn't new for this year. A report from earlier this year suggested that more than one million U.S. households disconnected their pay-TV services in 2011.

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Edited by Brooke Neuman

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