Cable subs shave before they cut

by Steve Blum • , ,

The pay TV subscriber count in the U.S. dropped below the 100 million mark in the fourth quarter of last year, according to Nielsen. That’s the number of households that buy traditional television programming packages from either cable, telephone or satellite companies.

The declining fortunes of traditional linear television are directly linked to the viewing – and buying – habits of young adults, age 18 to 34. These cord cutters are more likely to have broadband connections with enough oomph to handle video streams and pay for subscription video on demand (SVOD) services like Netflix.

But it’s not just younger cord cutters that are giving the cable industry heartburn. Cord shavers of all ages – people who trim back the number of channels they buy – are an even bigger problem, according to a story in Broadcasting & Cable

Nielsen’s cable universe estimates for April show a 1.7% decline in pay TV households but a bigger drop in subscribers for some cable network owners, according to analyst Brian Wieser of Pivotal Research.

To Wieser that suggests that while cord-cutting might not be the threat it was cracked up to be, cord shaving could be a bigger issue.

The acceleration in the cord shaving rate also indicates an increasing reliance on broadband connections for television viewing. Money gets spent on SVOD service instead of a fatter cable package. But there’s still a huge demand for linear video service at some level – 99 million customers is nothing to sneeze at. It’s still 85% of the U.S. market. Only 3.9 million households rely solely on broadband for television, about 3% of the market. That’s why Google Fiber bothers to include linear video service in its offerings, despite lagging take rates.