Economy, internet blamed for U.S. TV subscription declines

The weak economy is hitting Americans where they spend a lot of their free time: at the TV set. They’re cancelling cable and satellite TV subscriptions in record numbers, according to an analysis by the Associated Press of the companies’ quarterly earnings reports. The U.S. subscription-TV industry first showed a small net loss of subscribers […]

The weak economy is hitting Americans where they spend a lot of their free time: at the TV set.

They’re cancelling cable and satellite TV subscriptions in record numbers, according to an analysis by the Associated Press of the companies’ quarterly earnings reports.

The U.S. subscription-TV industry first showed a small net loss of subscribers a year ago. This year, that trickle has turned into a stream. The chief cause appears to be persistently high unemployment and a housing market that has many people living with their parents, reducing the need for a separate cable bill.

Subscribers hang up on cable and satellite in 2Q; cos. blame economy as Internet threat looms

But it’s also possible that people are cancelling cable in favour of cheap internet video. Such a threat has been hanging over the industry. If that’s the case, viewers can expect more restrictions on online video, as TV companies and Hollywood studios try to make sure that they get paid for what they produce.

In a tally by the AP, eight of the nine largest subscription-TV providers in the U.S. lost 195,700 subscribers in the April-to-June quarter.

That’s the first quarterly loss for the group, which serves about 70% of households. It includes four of the five biggest cable companies, which have been losing subscribers for years. It also includes phone companies Verizon Communications and AT&T and satellite broadcasters DirecTV Group and Dish Network. These four have been poaching customers from cable, making up for cable-company losses – until now.

The phone companies kept adding subscribers in the second quarter, but DirecTV and Dish combined lost them, a first for the U.S. satellite TV industry.

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