The cable TV and Internet landscape is a rapidly changing one, and it’s become increasingly clear to all parties involved that cord-cutting plays a significant role in the transformation. New data released this week by the Leichtman Research Group shows that during Q2 2014 major pay-TV providers lost about 300,000 net video subscribers, but added roughly 385,000 new high-speed Internet subscribers. This year top U.S. cable providers have passed an important milestone that has been anticipated for quite some time: they now have more broadband subscribers than traditional pay-TV subscribers.
The seventeen largest cable and telephone providers in the U.S., which represent about 93 percent of the market, now account for over 85.9 million subscribers. Top cable companies – including Comcast, Time Warner, Charter, Cablevision, and others – have nearly 50.7 million broadband subscribers, while top telephone companies like AT&T, Verizon, and CenturyLink account for the other 35.2 million subscribers. The latest increase in broadband subscribers amounted to 130 percent of those added in Q2 2013 – over double what the big boys of the industry added last year. In other words: cable is shrinking, and broadband is on the rise.
The trend has finally pushed the forecast of increasing broadband subscribers ahead of Pay-TV subscribers. At the end of Q2 2014, top cable providers had about 49,915,000 broadband subscribers and only 49,910,000 cable TV subscribers. While that may be a minuscule majority, it’s easy to see the writing on the wall. As time goes on, it appears more and more customers are deciding to nix traditional pay-TV models, choosing instead to find their news, media, and video entertainment online.
One other interesting piece of data from Leichtman’s research is the fact that top cable companies were responsible for a whopping 99 percent of the net broadband additions for the quarter – telecommunications companies made up the meager remaining 1 percent. It appears that, for now at least, Pay-TV giants like Comcast and its proposed bride Time Warner Cable are in the drivers seat when it comes to offering the Internet service of choice.
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