Market Overview

What's Next As More Consumers Shift From Cable TV To The Internet?

What's Next As More Consumers Shift From Cable TV To The Internet?

An important electronic milestone was reached in June. It underscored the ongoing seismic shift in how most consumers now get their news, information and entertainment.

For the first time, more people subscribed to broadband Internet service than for cable television, according to New Hampshire-based Leichtman Research Group.

"With the addition of more than 30 million broadband subscribers over the past decade, cable providers have clearly expanded well beyond their roots in cable TV service," Bruce Leichtman, the Group's president and principal analyst, said in a statement.

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"As of the end of 2Q 2014," he added, "the top cable providers now have more broadband subscribers than cable TV subscribers."

Cutting The Cord

The report looked at the 17 largest cable and telephone providers in the United States, a group representing about 93 percent of the market. It found those companies acquired nearly 385,000 additional high-speed Internet subscribers during the second quarter of this year.

According to the report, Comcast (NASDAQ: CMCSA) was the cable company with the most broadband Internet subscribers at the end of the second quarter. It had more than 21 million subscribers, including 203,000 net adds in that time period. Comcast was followed by Time Warner (NASDAQ: TWX) with nearly 12 million subscribers, and Charter Communications (NASDAQ: CHTR), with 4.85 million.

This change has been long in the making. Consider the explosive growth of Netflix (NASDAQ: NFLX), which has more than 50 million members in more than 40 countries and produces popular, original programming like Orange is the New Black and House of Cards.

Will Cable TV Become 'Just Another Niche'?

Wired, meanwhile, points out that while there are still close to 50 million cable subscribers, the traditional television format is being overwhelmed by all that the Internet has to offer.

"From mainstream streaming services like Netflix, Hulu, and Amazon Instant Video to niche sites like Funny or Die to YouTube celebrities — to name just some of the options that fall under entertainment — the kinds of moving pictures available and the ways to consume them have never been greater," the magazine notes.

"Within this broader spectrum, cable as a concept could become just another niche," it continues, "one channel among many as the insatiable internet swallows everything it encounters."


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