Cable and satellite television operators have in the past denied that there is a mass exodus of its customer base due to watching TV shows via streaming video outlets like Netflix and Hulu. However, a new report from Bloomberg is claiming that five of the top six cable and satellite TV outlets (Comcast, Time Warner Cable, Charter Communications, Cablevision and Dish Network) lost a combined total of over 580,000 subscribers in the second quarter of 2011. That's the biggest such decline the industry's history, according to the story. Only DirecTV added customers during the quarter.
In addition to losing customers to Netflix and Hulu, the story claims that part of the reason for the cable subscriber decline is competition from phone companies like Verizon (with its FiOS service) and AT&T (with its U-Verse service). Both offer TV packages in addition to phone and broadband access. The story says that Verizon and AT&T added a combined total of over 386,000 subscribers in the second quarter.
Yet another reason for the decline is strictly economic; a lot of people just don't have the money or the interest to pay for cable TV anymore. Craig Moffett, an analyst at Sanford C. Bernstein, says, "Rising prices for pay TV, coupled with growing availability of lower-cost alternatives, add to a toxic mix at a time when disposable income isn't growing. For younger demographics, where in many cohorts unemployment is north of 30 percent, and especially for those with limited or no interest in sports, the pay-TV equation is almost inarguably getting less attractive."