Almost Good News Subscribers of cable, satellite and telco video services declined 430,000 during Q3 2016, and 1.3 million year-to-date, which is the largest YTD loss ever recorded. The “good news” is that cable TV’s share of those 430,000 fewer subscribers, or 94,000, was cable TV’s “best” performance during the past 10 years. The Q3 decline was only half of the number of subscribers lost during Q3 2015. Actual good news for cable companies was the addition of 774,956 fixed US broadband service customers during Q3 2016, or a total of 57.79 million, a 62.5% share.

Hemorrhaging Subscribers During Q2 and Q3, Verizon lost 1.092 million pay TV subscribers, the most of the top 7 service providers. Dish Network was second with -231,000, followed by Charter Communications, -199,000. Of the top 7 pay TV service providers, only Comcast had positive net-added subscribers, or +28,000, moving its total subscribers to 22.428 million, second only to AT&T, at 25.292 million. Adding Dish Network’s Sling TV service subscribers improved the 1.3% decline in pay TV subscribers for Q3 2016 by 5 percentage points to -0.8%.

Major Media Movers Charter Communications acquired Time Warner Cable (TWC) and the smaller Bright House Networks during 2016, increasing its total residential customers to 24.6 million. Because many of the TWC subscribers lost their discounted rates as a result of the merger, Charter lost 47,000 subscribers during Q3 2016, and all of them were former TWC customers. Also during 2016, AT&T acquired Time Warner, Inc., which included HBO and its online channel, HBO Now, and Warner Brothers and Turner, which just launched FilmStruck, its new streaming video service.

Defining Those Who Decline Cable Cord Cutters – Former cable TV subscribers who have canceled their service and replaced it with streaming video services (Amazon, Netflix, Hulu, etc.). Cord Shavers – Cable TV subscribers who have eliminated channels from their subscription, which are typically premium channels, such as HBO, or sports and other packages charged at an additional rate. Cord Nevers – Households that never had a cable TV subscription, but are likely to have their Internet broadband service from the local cable TV provider, so they can access streaming media services and other digital services.

Cutting the Cord Over Cost In a January 2016 Harris Poll, 56% of surveyed consumers said the #1 reason they cut the cable TV cord was that the service had become too expensive. Service costs have increased first because of the increase in network and broadcast carriage fees, or the rate a local cable TV provider must pay per subscriber for ESPN, AMC, Discovery, etc. The second factor is the rental fee subscribers pay for the set-top box, but with the change in the administration in Washington, DC, the FCC is likely to drop its investigation of set-top box fees.

The Cord-Cutters’ Journey Based on Nielsen research, NCC Media found that since November 2016, cable TV has lost 2.5 million homes/subscribers and that 81%, or 2.1 million, of those homes became broadcast only. These additional 2.1 million have increased the total number of broadcast-only homes by 16.5% since November 2014, or 14.5 million, which is 12.8% of all TV households. Because these households only watch local TV, they represent a larger percentage of all local broadcast viewers, or 17.2%, which also means 17.2% of ad impressions/GRPs.

Cord-Cutters May Be Low-Grade Consumers Although more broadcast-only homes increase local TV stations’ ad impressions, they are not prime consumers targets, according to NCC Media data and analysis. Adults 25–54 in broadcast-only homes with $50K+ in annual income index at 28% less than all adults 25–54. At $75+ annual income, their index is 62 and at $100K+ annual income, their index is 56. Adults 25–54 in broadcast-only homes are 26% less likely to own a home, 10% less likely to be employed and 6% less likely to have children at home younger than 17.

Cable Comparisons in Spokane Data from The Media Audit’s Fall 2016 survey for the Spokane, WA market of adults 18+ shows a similar percentage with and without local cable TV service, at 31.5% and 29.5%, respectively. Although almost as many adults 18–34 don’t have cable as those who do, a larger percentage of adults 35–49 have no cable or satellite while larger percentages of adults 50–64 and 65+ have cable. The top 5 cable channels among adults 18+ in Spokane were HGTV, Food Network, The Discovery Channel, The History Channel and TBS.

Consumers’ Cable Choices According to a Digitalsmiths 2016 survey, consumers’ top choices for a á la carte cable subscription would be the old, stalwart networks, ABC, CBS and NBC, at 70.7%, 70.1% and 65.5%, respectively. Although a á la carte package could reduce the cost of a cable TV subscription, it would be impractical, as the amount networks charge for access to its content is much more than what consumers are willing to pay. Another 2016 survey found that 58% of consumers think TV-connected streaming devices (Amazon Fire Stick, Roku, Chromecast, etc.) “should be used as an addition to regular TV broadcasts.”

Cable and Non-Cable Shoppers Adults 18+ in Spokane without cable TV are much more likely to own a Ford while those with cable are more likely to own a Lexus. Those with cable TV are also significantly more likely to remodel their home or plan to buy a home during the next 12 months than adults without cable TV service. Adults with cable only are 84% more likely to shop at Nordstrom, but the numbers for shopped at Walmart are essentially the same as well as those who made 12 or more e-commerce purchases during the past year.

Entertainment and Activities Choices Other CrossTab Reports of Spokane adults 18+ revealed that those without cable have a higher percentage and index for attending opera/symphony/theater during the past year that those with cable. The higher percentage and index of adults without cable who participated in snow skiing/boarding may correlate to the many young adults who participate in snow sports and are cord-cutters and cord-nevers. Adults with cable were much more likely to have attended 3+ college/professional sports events during the past year, indicating they have the higher incomes and the financial wherewithal to pay for cable TV.