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More consumers cutting cable – Free TV viewing choices chip away at business February 21, 2009

Posted by pannet in Multimedia.
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Time Warner Cable, the nation’s second-largest cable operator, lost 119,000 basic video customers in the fourth quarter, even after excluding subscribers it gave up from the sale of some cable systems. The company also posted slower growth in new digital cable TV, Internet and phone subscribers. More details will emerge as other cable and satellite TV operators report earnings in the coming weeks. This is not to say that the cable business is in trouble. It’s a mixed picture in this economy. While there will be some people who will completely give up their pay TV service, many folks will keep the subscription but cut back instead on going out to the movies. They also might give up a movie channel or two and buy fewer pay-per-view shows.

But pay TV providers are right to be alarmed. Not only has a flood of TV shows and movies become available online, but the video quality has gotten better. Netflix is expanding its service that lets subscribers stream movies and shows from the Internet at no additional cost. And more and more people have home broadband – 57 percent of American adults, according to the Pew Internet and American Life Project. Throw in the worst economic slowdown in nearly a century and people question whether they still want to pay for cable or satellite. As of January 2008, the average monthly home cable bill was $84.59, up 21 percent from two years earlier, according to the Federal Communications Commission […]

To be sure, there can be drawbacks to canceling pay TV. Watching shows on a PC still isn’t as comfortable as watching TV while relaxing on a couch. The quality of Internet video, while improving, still isn’t as good, especially for live events, in which video and audio might not be in sync. While some game consoles, Blu-ray players and other devices enable video to be seamlessly delivered over the Internet to a TV, hooking up a computer to the TV to watch the full gamut of online shows on a big screen can take some technical savvy. […]

Tulsiani noted that the success of Hulu.com, a joint venture NBC and Fox that officially launched last year and offers free TV shows and movies, has attracted other entrants. Perhaps to hedge its bets, Philadelphia-based Comcast Corp. – the nation’s largest cable company – runs a similar site called Fancast.com, while full TV episodes now are available through the networks’ Web sites. YouTube made deals last November to carry full shows in an alliance with CBS and MGM.

This is what worries Time Warner Cable’s Britt. He warned that if cable networks keep moving content online for free, it would hurt them and cable operators like Time Warner. Because with fewer subscribers, cable operators will pay less money to programmers for the right to air their content.

Missoulian: More consumers cutting cable – Free TV viewing choices chip away at business.

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