US Cable Subscriber Base Shrinking

According to reports, cable household subscribers may have finally hit the tipping point and will begin to decline.  "The number of Americans who pay for cable-like TV products is declining, says a research forecast that claims subscriptions peaked at nearly 101 million in 2011 but will decline to less than 95 million by 2017."  Blame the high cost of cable, blame the internet for bringing competition to the cable model, call it cord cutting, but subscriber numbers are declining.

But not to worry because cable companies are not about to go belly up.  For one thing, the decline is a long way from serious economic jeopardy. And second, these same companies are operating in a multi-platform world where they are finding revenue from content spread across the market.  And as the Paid Content article directly exclaims, "The first cable decline is a tipping point, not a revolution."

Internet Connectivity Everywhere At A Cost

For almost all of us, we are on the grid.  Wherever we go, we are found.  We can track our iPhone, but our iPhone also tracks us.  We can drive anywhere we want, but our EZ Pass tells others which check points where passed and how much to charge us.  And we can be constantly connected to the internet, whether through our TVs, phones, laptops, and yes, our cars.

Sirius has had a pretty exclusive connection to us in our cars with satellite coverage and a wide assortment of music, news, sports, and more to entertain us.  But the rise in internet connectivity has enabled competitors to enter this space as well.  "But Pandora is making a huge push to get into the car, a move that dovetails with ubiquitous wireless access that makes it easier to listen to its service.
'Internet-enabled radio in the car has already begun,' Pandora Chief Executive Officer Joe Kennedy said in an interview. 'It will grow as a snowball, initially small but growing exponentially.'"  And ultimately, more competition means lower prices to consumers.

Interestingly, according to the article, Sirius and Pandora each face different cost structures with Pandora paying out far greater royalty payments.  And to complicate the cost issue even more..."Traditional radio pays nothing at all to SoundExchange, although it pays composers to air their music."  

Wireless connectivity is big business these days and the above growth is just one indication why Dish Network wants to buy Clearwire and compete in the space.  Because at the end of the day, to be connected, we as consumers must also pay for access to wireless along with the services themselves.  And with more desire to be "always on and connected", wireless connectivity is moving more and more away from an all you can eat model toward a usage fee, with heavy users paying more to be connected.