Cable TV Subscription on the Decline: Cord-cutting is the Culprit

We hear so much about the benefits of Internet TV. But is it good enough to replace Cable TV? Why can’t we pay for only what we want to watch on Cable TV? Will Cable TV lower prices as Internet TV trend rises? Is Internet TV really the future? And the debate goes on. So, who is to prevail here? Well, the numbers speak for themselves:

Cable, satellite and telco providers lost 216,000 subscribers last quarter, research firm SNL Kagan claims, the worst performance for these industries since the 1980s, when SNL Kagan began tracking this data. The firm expects web TV options such as Hulu to become the primary way of watching television for 3 million U.S. homes this year, out of 115 million TV households in the United States.

With ever increasing bandwidth and internet speeds, Cable TV is sure to get a tough time to maintain it’s customer base. As analysts speculate to find a reason for this declining trend, they list the worsening economic conditions as a main factor. Still, viewers will get a chance to experience the ease and benefits of Internet TV and who knows if they want to switch back later.

A very apt analysis was made by Mark “Rizzn” Hopkins in a open letter to cable companies and telcos. He listed over-pricing of Cable TV and lukewarm attitude towards hardware innovation as the reasons for the doom of CableCos and Telcos:

Over the past several months, services like Hulu, Spotify, iTunes, YouTube and many other technologies (like video and audio podcasting) have been showing up on more and more devices, slowly encroaching on your jackpot market: the living room. Today, though, Hulu has very loudly announced that they’re deploying a paid service – only $10 a month – that allows anyone access to the full range of programming they enjoy via you guys.

That means I can connect with my WiMax connection from MetroPCS, Sprint or Clear with my XBox 360, Playstation 3 or iPad and watch everything from live sports to DVD releases to last night’s primetime TV programming. My raw monthly cost for this action will be between $45-65 a month without you. If I wanted to do this with you guys, it would cost me anywhere from $50-150 a month.

In the end, consumers are starting to look to their wallets, and the mild hassle of cutting the cord is looking as if it’s worth it for the cost savings.