The cable TV business just had its worst year ever, according to Wall Street media analysts Craig Moffett and Michael Nathanson. Providers of
TV, broadband and phone communications lost 687,000 subscribersduring Q3, they wrote in a recent note to investors. They gained 574,000 new ones, for a net loss of 113,000, according to the LA Times:
“The pay-TV industry has reported its worst 12-month stretch ever,” Moffett and Nathanson wrote.
The TV and broadband business is stuck in a suicidal business model, the pair suggests. Although the cable and broadband business is losing customers, its total revenues are rising. The remaining customers are paying higher prices for ever-more costly bundles of premium TV channels and high-speed internet access.
The cord-cutters are the ones who can no longer afford it all.
At Business Insider, we’re currently interested in the theory that cord-cutters are a threat to both cable TV and broadband web providers because it is now so much easier to use free wifi provided by businesses, campuses and some cities.
In the meantime, the cable TV industry is pursuing a pricing model that is killing off its own customers, Moffett and Nathanson suggest:
“Of course, the fact that pay-TV revenue is still rising smartly is part of the problem,” Moffett and Nathanson wrote. “We have always argued that cord-cutting is an economic phenomenon, not a technological one. … Pay-TV revenue growth reflects rapid pay-TV pricing growth and that is precisely the problem. Rapidly rising prices are squeezing lower-income consumers out of the ecosystem.”