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Cable Subscriptions Continue to Decline, but for How Long?

Sections: Streaming, TVs, Video

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Image courtesy of paidContent

The website paidContent has an interesting story that isn’t revelatory in pointing out that cable subscribers are increasingly cutting the cord in favor of streaming content, but is still worth reading for a better handle on the exact numbers involved in this ongoing diaspora, as well as some analysis regarding the future of this trend:

According to [a] Convergence Consulting report, “The Battle for the North American Couch Potato: Bundling, TV, Internet,Telephone, Wireless,” 2.65 million American multichannel subscribers cut their cords between 2008-2011 and switched to over-the-top (OTT) services like Netflix (NSDQ: NFLX) to get their video programming. The report says that only 112,000 cable, satellite and telco TV service subscriptions were added in the U.S. last year — less than a third of the 380,000 added subscriptions that Leichtman Research Group reported last month while auditing only the top multi-channel programming services.

The story goes on to point out that the power play between cable content providers rather hearkens back to the Red Queen Hypothesis. In other words, we’re dealing with something of an evolutionary arms race here, and should reach some sort of equilibrium at some point:

Rather than sounding alarm bells, however, Convergence Consulting doesn’t believe these data points signal any kind of imminent threat to the multi-channel business.

“The revolution is not coming, at least not for a very long time,” Brahm Eiley, Toronto-based co-founder of the research group, told paidContent. He says that, as content providers (i.e. TV networks) continue to try to establish greater value for their movies and shows, they’ll continue to offer them through over-the-top distribution models. However […] if the cable and satellite business were to suddenly lose millions of subscribers rather than report narrow gains, Eiley doesn’t believe the major entertainment conglomerates would be as eager to sign deals with Netflix and Hulu.

Read: [paidContent — Research: Over 1 million U.S. cable subscribers cut cord in 2011]

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