Tech & Biz

Cable Companies Lose 500,000 Subscribers in 3 Months

by Jordan Yerman | November 5, 2010 at 08:23 am

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Cable Companies Losing Viewers Quickly

Comcast, Time Warner, Cablevision, and Charter have lost a combined total of 518,000 subscribers in Q3 2010. Actually, Q2 was even worse: over 700,000 subscribers lost.

So, what is Big Cable doing to woo back its customers? If you guessed "lowering rates to woo them back", you'd be wrong. In fact, the major cable providers have been raising their rates by around 10% year over year. What's the breaking point, the rate at which subscribers cut the cord?

Obviously, that number would be around $130, which is what the major providers are charging. Even as Time Warner lists increased competition and a weak economy as primary reasons for its dwindling subscriber base, its average revenue per user has been following the 10% growth trend; in other words, "getting way more expensive".

In a world populated by Hulu, Netflix, Youtube, and The Pirate Bay, this is just not sensible. Big Cable lost over 1.2 million subscribers within six months. We'd call this a trend, and hiking subscriber fees will only chase away more people who will find other ways to watch Mad Men.

Comcast reported on its earnings call that average revenue per user (ARPU) increased by 10 percent year-over-year, ending the third quarter at about $130 per month. Charter’s ARPU also rose about 9 percent, to $126. And while Cablevision’s reported average revenue per sub didn’t grow as fast as the others, it’s now a whopping $149.