Is Bundling Propping Up The Cable Industry?

dkreichen1968

Moderator
Staff member
#1
Are creatively-priced cable bundles artificially lowering video subscriber losses? It’s a legitimate question for cable sector investors trying to estimate how many cable TV subscribers plan to cut the cord. It may be more than the hard numbers suggest.

Anyone looking for a home Internet connection can often find a lower price for that by agreeing to take television services with it. In November, in a nifty bit of market research, The Wall Street Journal provided a sampling of the practice with rates at Comcast (CMSCA), Time Warner Cable (TWC) and Verizon Communication’s (VZ) FiOS.

That likely means some subscribers are getting cable TV even though they would not pay for it directly. In other words: without an artificial incentive to subscribe, the rate of video subscriber losses for the cable companies would be even faster than their most recent reports suggest.

The hard numbers already look alarming for the three largest cable companies. In the 12 months ending March 31, the number of Time Warner residential video subscribers fell by 557,000, or about 4.5%. Charter’s (CHTR) fell by 199,000, or 4.8%. Comcast, which reports video subscriber numbers that combine residential and generally stickier business contracts, lost 359,000 video subscribers in that period for a 1.6% decline. Any way you look at it, that’s some 1.12 million gone in 12 months from three companies alone.
Read More: A Closer Look at Cable TV Subscriber Defections

It is true that the cable industry, which saw large gains during the last decade, has gone flat, with the MVPD industry as a whole having it's first negative growth 12 month period ending at the end of march. The big thing for legacy cable operators is the move from legacy cable to telecoms. Both Verizon FiOS and AT&T U-verse have experience sustained growth over the last few years, mostly coming from legacy cable. Expect that to continue as CenturyLink is preparing for a major expansion of their Prism TV service. Meanwhile the industry as a whole can be expected to contract as more and more people discover free digital television and internet streaming.
 

MrPogi

Moderator, , Webmaster of Cache Free TV
Staff member
#2
Many people take the bundle because the price of cable + internet is the same as internet alone.

I built my own bundle:
Internet: $45/ month from Digis (Wireless Internet Service Provider)
Phone: $2/ month (Magic Jack)
TV: FREE with Roku, antenna, and FTA satellite.

$47 - That's a price Comcast can't beat.
 
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