Cable Execs Now Falsely Claiming Cord Cutting Is Slowing Down
from the self-delusion dept
At no point has the cable industry or its executives been particularly keyed in to the “cord cutting” threat. As streaming video has chipped away at their subscriber bases, most cable giants like Spectrum and Comcast have responded by raising prices. And when confronted by growing evidence that cord cutting (defined as cutting the TV cord but keeping broadband) was a growing trend, most of these same executives spent years first denying cord cutting was happening, then trying to claim the only people doing so were lame man-children living in their moms’ basements.
Charter CEO Tom Rutledge was a key part of this cable executive myopia, both failing to see the trend coming, then failing utterly to respond to it in any meaningful way. The result: Charter has been losing subscribers for years, last quarter losing 75,000 cable TV customers. That’s not as bad as the 1.36 million pay TV customers lost by AT&T in the same period, but it’s not what you’d advertise as “good,” either.
Having no meaningful reputation on this subject to stand on, Rutledge last week tried to insist that the threat of users cancelling bloated, costly pay TV bundles and moving to streaming was a phenomenon that would soon slow down:
“I think in aggregate they’re going to slow down,” said Rutledge. “Because I think most single-family homes have big TVs in them and that’s where you get sports, that’s where you get news, that’s where you get live TV like this. It’s still going to be under price pressure. I’m not saying the category isn’t under pressure. But I think the rate of decline will slow.”
But there’s no actual evidence to support that conclusion. Cord cutting has only been accelerating and breaking records throughout 2019. And with a number of high profile streaming alternatives like Disney+ and Apple TV+ having launched this month, there’s absolutely no indication that trend is going to change. That’s something being made clear at research firms like UBS, which is actually predicting that things will be getting slightly better for AT&T, and marginally worse for cable giants like Charter:
“UBS predicted that the U.S. pay TV industry will lose another 6.2 million video subscribers in 2020, down slightly from the 6.4 million the analyst firm predicts will be lost in total this year. If that loss comes to bear it will represent a 6.7% rate of decline, ahead of 6.2% in 2019 and well ahead of 1.2% in 2018 when video subscriber losses totaled 1.2 million.
“We now expect industry losses to remain in the 6-7% per year range for the medium term, suggesting worsening trends in domestic core affiliate into next year,” wrote UBS analyst John Hodulik in a research report. He said that improvement at AT&T will likely be offset by worsening trends for cable providers and other MVPDs.”
The irony here is that Rutledge’s prediction would actually be true if cable giants were willing to compete on price and customer service. But they’re not, so the losses are likely to continue, especially with new services like Disney+ jumping into the fray at a measly $6 a month.
This is crazy, but maybe don’t take predictions from a guy whose response to increased competition is to raise prices, repeatedly. Or from a guy whose company is so disliked, it literally has among the worst customer satisfaction rankings of any company, in any industry in America (pause and think about that accomplishment for a moment). Cable executives could respond to the cord cutting threat (read: cheaper, better competition) by fixing customer service and lowering prices. Instead, they’d rather stick their heads three feet underground, the very reason they’re in this predicament in the first place.