Cable TV Industry Losing Record Numbers of Subscribers

For years, the amount of time I spend watching tv has dramatically been decreased to practically nothing. Aside from a few number of shows that I still enjoy, there’s nothing really exciting on. However, this article is not about the quality of tv—it’s about the alternative choices.

In my current house, there are six televisions all set up with boxes from AT&T UVerse. I don’t get into the downsides of AT&T UVerse here, but let’s just say being able to only watch 4 different channels at any one time across all 6 boxes is an outright crime! The worst part about this is that when that 5th person wants to come on and view a different channel, he or she has the ability to either watch one of the 4 channels being viewed or kick off the newest person to turn on their tv! Sorry, I said I wasn’t going to get into it, so let’s move on!

According to the Associated Press, eight of the nine major subscription-TV providers have lost 195,700 subscribers between April and June of this year. This group provides TV services to about 70% of the country, so these numbers equate to 0.2 percent of their 83.2 million customers. This might not seem like a lot, but if this trend continues, who knows what may happen.

Actually I have some theories on that! First of all, why are people leaving their tv services? One major contributor to this downsizing is the economy. Naturally, when times are tough and unemployment rates are high, people begin to trim expenditures where they can afford to. “Afford” in this case means where people are willing to let go of some luxuries. For some reason, they’d rather eat than to watch tv.

In the last few years, Verizon, AT&T and DirecTv have all been ‘stealing’ customers away from the big cable companies like Time Warner and Cox which would explain for their continued losses year after year, but now all of these companies are starting to feel the burn. Another contributing factor in the losses is assumed to be Internet video sites. More and more younger people are getting their entertainment fix on sites like YouTube, Hulu and Netflix. In the case of Hulu, users are opting to wait a day or two before their favorite show appears on the site opting to watch it there instead of sitting in front of their tv.

Even for those wishing to watch Hulu on their tv, they can do so now with their Blu-ray player or Xbox system. YouTube and Hulu are free while Netflix charges $7.99 for the streaming of any available DVD they offer which includes feature films and plenty of television shows that have appeared on DVD discs. Hulu Plus offers customers the ability to watch shows online with less commercials and usually a lot sooner than the free users. No matter how you slice it, these online services can undercut tv subscriptions any day of the week.

However, as the paradigm shifts, we can surely expect an increase in fees that we pay to those online services because afterall, they have to pay for the content too and what do you think all the tv and movie studios are going to charge them if they can’t get their money from advertisers?

My two cents

There is no direct comparison between cable tv and Internet tv simply because with Internet tv, you have to find everything you’re looking for and constantly change videos as each of them end and that requires work. Part of the enjoyment of watching tv is having the never-ending flow of programming at your disposal without having to get up and do anything about it.

As for me, I spend most of time at a computer both for work and pleasure, so it’s a natural thing for me to watch tv and movies online. However, I don’t watch much of anything anymore due to my hectic schedule so I could do without the tv service and most of the online stuff, but I’ll never get rid of my Netflix!

Apple Versus Netflix: The Digital Entertainment War

I just talked about this yesterday and it looks like the rumors are already gaining momentum. The debate about whether Apple would try to take on Netflix in their ability to serve up digital content to the masses has the community jumping. The evidence? A huge, brand new data center built by Apple in North Carolina is on the verge of going operational.

This data center is said to rival those of other media companies like Google and Microsoft. Even better, Apple is already planning to build another one! All this information points to Apple’s desire and ability to be the leader of digital entertainment distribution.

iTunes has been widely successful since it first launched in 2001 and it has been the leader in digital music sales for years. However, it’s always lacked in the television and film arena. For television, it’s a no-brainer—competing with cable and broadcast networks who deliver instant programming 24/7 on hundreds of channels is no small feat. However in the film industry, we have been renting movies since 1985 when Blockbuster first opened and then in 1999, Netflix revolutionized this process by bringing movies to your door. Netflix revolutionized this process again by offering most of these same movies in live streaming.Netflix

Apple has the Apple TV and the iTunes store which allows for the “purchase” of movies and even tv shows (mostly those that have made it to DVD collections), but so far, they can’t touch Netflix. In fact, only recently has Apple began streaming their movies through the new Apple TV opting to cut out the ability to download and store movies on the device itself. This major change could very well be the stepping stone Apple needed in their quest to dominate your living room.

Pros and Cons

In Netflix’s corner:

  • Ability to have physical DVD and Blu-ray discs sent directly to your door
  • Live streaming of thousands of titles (and more coming each day)
  • Multi-device support (Blu-ray players, free phone apps, TVs, etc.)
  • Relatively cheap
  • New pricing plans for streaming service only (no in-home discs)


  • Not all movies are available via streaming
  • In-home disc count limited to 4 max at one time
  • TV shows limited to those only available on DVD

In Apple’s corner (Potentially):

  • Live streaming of thousands of titles
  • Possibly cheap? We’ll have to wait and see.
  • Multi-device support?


  • Might have to buy Apple TV to stream
  • No in-home discs

It’s hard to develop a pros and cons list with a product/service that doesn’t exist yet, but in terms of pure speculation, Netflix slightly leads the pack. The main reason for this is because they have a huge head start. Not only do they have hundreds of thousands of physical media for rental, but they are gaining massive traction with adding new streaming content. Netflix also has their software available on almost every connected device these days. Just about any Blu-ray player and TV comes with the ability to stream movies from your account. Knowing Apple, that alone might be the sole competitive difference. Apple is not known to be too kind when it comes to sharing software.

My two cents

Apple does have the advantage when it comes to customer base. They have millions of users already linked to iTunes via their credit cards, so adding an additional service charge to bring movies into the picture will likely not be a major hurdle for most consumers. Only time will tell of course and for me, it’s dependent on just how well Apple delivers that content. The deciding factor will come down to three things: 1. Title availability, 2. Network speed and 3. Where I’ll be able to watch this content.