Wednesday, August 8, 2012

Cord Cutting?

Another article talking about cable companies losing 400,000 subscribers last quarter. Of course I would expect those numbers to be made up in later quarters and the overall comparison to last year to be a wash.

Two thoughts keep popping up every time I see one of these articles:

1. Say an older couple who had cable moves out of an apartment and younger tenants take over who never bother to add cable but who sign up for a better broadband service than the older couple had - do these new tenants count in the statistics as cord cutters? Technically they never had a cord to cut. Also the revenue from the broadband service may be greater than what the older couple was paying for cable (and with a greater gross margin). How is this a bad thing?

2. Articles like this always seem to bring up Netflix and Hulu like these services don't also contribute to the content providers bottom lines. In the example above the new young tenants are probably consuming more content then the older couple who may have just watched local news and sports.

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