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Will cable come back?

December 7, 2010

That’s the real test for cable, in which direction the supposed “cord-cutting” will go once (or if) the economy ever picks up.

Neil Smit, president of Comcast Cable, acknowledged in a recent call with investors that some customers had dropped cable for free signals. Company executives also said they expected business to rebound with the economy.

Thus far, despite all the brou-hah-hah, the relative number of cord-cutters has been small and it has mostly been low-margin customers, the type of customers cable companies don’t want anyway.

You could reasonably assign those customer losses to the crappy economy and then anticipate customer increases once things get better.

If that happens, then “cord-cutting” has been a fad. But if the downward trend in customer subs (or the upward trend in cord-cutting) continues, as housing and/or employment picks up, then the cable industry is in trouble.

I’m a fan of the cord-cutting movement (as a cord-cutter myself), but it’ll be some time before we understand how real this trend is.

However, high-profile channels like HBO start making their own moves could also nudge cord-cutting from fad to bona fide trend:

(Time Warner Inc. Chief Executive Jeff) Bewkes has suggested recently that HBO could be sold directly to consumers on the Web.

Also, the big question is of course sports, and how/if you’ll be able to access outside of a cable subscription.

  1. Ok, I just bought a Boxee Box but did not yet cancel my cable subscription… I am only a semi cord-cutter I guess 🙂
    Despite the not yet optimal experience with Boxee (amazing number of bugs!!) what is really missing is the content. As a engineer I could not be happier with Engadget show and alike but my wife and my kids are still missing some other content (free, UGC and premium). HBO moves is interesting and could definitively means the end of my cable subscription. The only part missing would be the billing system as I definitively do not want to take out my credit card every time I want to access premium content.
    Regarding sport events… can’t they also be streamed on the web and distributed OTT. I guess costs for the production is a problem but is there something else ?

  2. Marc permalink

    Your post made me think of the recent content acquisitions by cablecos (Comcast – NBC) and telcos (Bell – CTV) — locking up content to offer to consumers as assets and market differentiators. Also, the rumour of Rogers Media buying the OTPP share of MLSE ( ) is an interesting discussion point on that topic specific to sports.

    As a consumer, I’m pretty sceptical about using content as a differentiator (or motivator) to push devices, data plans, etc. Maybe I’m not thinking far enough ahead, but my purchase behaviour tends to be dominated by one thing: price of the device vs. hardware features.

    It sounds like we are somewhat alike in that regard — I don’t need to watch Glee in schedule or next day catch-up, so why would a telco or cableco think that could be a motivating factor when it comes to me buying a IPTV service or mobile device?

    Are the cablecos, telcos, etc. barking up the wrong tree by locking up content companies? Aren’t regulators like the FTC and the CRTC going to mandate universal access to content to prevent the creation of content/access oligopolies? Isn’t the future really just about a price war on data costs as opposed to silos of devices and content? Isn’t the best model to be a data plan provider to home and mobile (which they already are) and promote the consumption of content no matter who owns it?

    I’m obviously missing something here… Would love to hear your thoughts on this or see you post a blog on the topic.

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