Television is currently undergoing a transition. Traditional pay TV providers such as Comcast and Time Warner Cable find themselves exposed to new competition from companies such as Netflix, Apple and Amazon that offer à la carte video content.
The term “cord cutting” has been thrown around a lot in this context and it refers to people cancelling their pricy cable or satellite TV packages in favor of the more flexible solutions offered by Netflix and co.
And while we do not think that the alternatives to traditional pay TV are complete enough yet to induce a mass exodus of subscribers, the basic trend is starting to show:
In the second quarter of 2012, the four largest U.S. pay TV providers combined (Comcast, Dish, DirecTV and Time Warner Cable) lost 407.000 video subscribers. It was the first time that all four of them posted negative subscriber growth in a quarter. Meanwhile Netflix, arguably the biggest threat to traditional pay TV, gained 528.000 streaming subscribers in the U.S.
The Cord Cutting has Begun
Description
This chart shows net subscriber additions of the largest U.S. pay TV providers and Netflix in the second quarter of 2012.
