But for the most part, the cords remain intact, the latest crop of earnings reports indicate. Considering the fragile economy, cable and satellite subscriptions seem to be faring better than the industry had feared and its Internet rivals had hoped.
Even as Internet video viewing increases, the vast majority of American households are still paying for television subscriptions and watching most video that way. Those who are canceling are doing so, it seems, because of poverty, not improved technology.
“Overwhelmingly, the losses are coming at the low end of the income spectrum,” said Craig Moffett, an analyst for Sanford C. Bernstein. Most such cord-cutters do not have a broadband Internet connection, he said.
Although cord-cutting losses adversely affect distributors, they have to date been largely offset by increases in broadband subscriptions and business services. Business clients are the single biggest area of growth for Comcast and Time Warner Cable, the country’s top two cable distributors. That is one of the reasons why analysts say the companies are stable despite pressure on the television subscription front.
Speaking to investors last week, Glenn A. Britt, the chief executive of Time Warner Cable, called residential broadband and business services “our two most promising areas.”
The ripple effects of hard times for American households are evident in the revenue and subscriber figures recently shared by Mr. Britt and others. Some cable subscribers are cutting back on premium channels like HBO or Showtime and are dropping the digital video recorders and landline telephones that they signed up for a few years ago.
Meanwhile, because fewer people are moving into new homes or starting families, there are fewer new households for distributors to sign up for TV and broadband service.
When it reported earnings on Friday, Cablevision, which mostly serves subscribers in the New York metropolitan area, said it believed that the number of occupied homes in its service area had declined in the last 12 months, putting additional pressure on the company.
Vijay Jayant, a senior managing director for the ISI Group, said he anticipated an overall dip in TV subscribers for the quarter, just as in the second quarter, when the top publicly traded distributors lost about 450,000 subscribers in total. (Each year the second quarter is affected by seasonal factors like the departure of college students; in the 2010 period, distributors lost 200,000 subscribers.)
But Mr. Jayant and other analysts remain bullish. Right now, he said, “it’s a housing issue, more than anything else.”
The lack of new housing, of course, is tied to the broader economy. When Time Warner Cable, which has been losing TV subscribers to competitors for years, reported a net loss of 128,000 in the quarter that ended Sept. 30, it noted that fully half were analog subscribers, who generally pay less and get fewer channels than digital subscribers. Analog subscribers represent about 25 percent of Time Warner Cable’s subscriber base.
“These are families that are struggling to make ends meet,” Mr. Moffett surmised.
Over all, it is striking how steady the levels of subscriptions have been. About 100 million households pay for TV subscriptions. “When you think about it, nearly everyone watches TV, and they watch a lot of it,” Mr. Britt said on Thursday.
The Cablevision chief operating officer, Tom Rutledge, struck a similarly optimistic note a day later. “Over the long term,” he said, “I think the business has a lot of growth to it.”
In some areas, Time Warner Cable has been marketing what it calls “TV Essentials,” a less expensive monthly package that lacks ESPN and other channels. Other distributors have shown interest in less costly tiers of service, too.
Mr. Britt told investors last week that although “TV Essentials” generated “lots of interest, the vast majority of customers who call about the offering end up taking a more robust video package.”
This article has been revised to reflect the following correction:
Correction: October 30, 2011
An earlier version of this article incorrectly identified Tom Rutledge as Cablevision’s chief executive. He is the company’s chief operating officer.
Article source: http://feeds.nytimes.com/click.phdo?i=3652a35a08bbdbee65c0de5ce5df16a9
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