Nothing To See Here
The amount of lazy reporting that goes on in this space continues to amaze me. The latest example is the misinterpretation of a report on a drop in US cable subscriptions to mean that cord cutting is on the rise and viewers are abandoning pay TV in droves.
Only the report was about actual cable subscriptions, e.g. the numbers reported by cable companies like Time Warner and Cablevision. It does not take into account the numbers reported by pay-TV services that don’t rely on cable, like Verizon FIOS, AT&T U-Verse, Dish and Direct TV.
The telcos in particular reported a net gain in subscribers.
Furthermore, most industry observers assume that since the two numbers are relatively equal, all that’s at play here is that the newer telcos services (FIOS and Uverse) are stealing subscribers from their more entrenched rivals.
And, as Peter Kafka points out in the Wall Street Journal, cable subscriptions almost always drop in Q2, a time when many people are moving and college students leave school. The same way they rebound in Q4, which is when a true accounting is best done.
The US pay-TV industry may not be booming, but with something like 80-90 percent market saturation, it’s not shrinking.