Last November, I wrote a column here about the future of cable television. In that column from last November I forecast:
“Cable television subscriptions will experience noticeable percentage declines in the next three to five years.”
Last week it was announced that for the first time in history paid television subscriptions dropped 216,000 with cable taking the greatest hit.
The conventional wisdom of course is that this is due to the bad economic conditions of today. Of course that is a factor, but the times have been bad for the past two years. The new dynamic is what I touched upon in last year’s column; that the video viewing marketplace is fundamentally changing, that disintermediation is entering the living room with televisions with internet connectivity and that people have become increasingly comfortable with alternative screens. In addition, people have come to accept paying for what they watch. The cable television model is based upon having people pay for all the channels they don’t watch. Why would people who willingly pay for what they watch any longer except paying for channels they don’t watch?
Of course, a decline of 216,000 subscribers is nowhere near a “noticeable percentage decline”, but I believe that this first ever downturn will be looked back upon as the early indicator of the trend I forecast last year. As for the rest of that forecast from last years’ column:
“This decline will only be slowed if they [cable operators] accept unbundling and price per channel. This will cause a variety of cascading problems for all those reliant upon cable television distribution.”
This part of the forecast will take a few years to become fully realized.
In conclusion, there might be an occasional uptick in cable television subscriptions ahead, but the long term trend of declining subscriptions has just begun.