As sites like Hulu and Netflix drew viewers with promises of just-aired television shows, the TV industry has been enveloped by a fear of cord-cutters. But those TV companies might want to take a deep breath because, according to cable's latest earnings reports, old-school TV is doing just fine.
Recent numbers show that the majority of American households are still paying for—and watching—their cable TV subscriptions, says The New York Times. And people who are cancelling their subscriptions aren’t doing so because they’d rather watch TV online, but because they can’t bear the financial burden of a monthly cable bill.
“Overwhelmingly, the losses are coming at the low end of the income spectrum,” Sanford C. Bernstein analyst Craig Moffett told the Times. And most of those cord-cutters don’t have a broadband Internet connection, he said, meaning that they aren’t jumping ship to Hulu or Netflix. Many other cable customers aren’t completely cutting the cord but are scaling back on pricey extras like premium channel subscriptions, DVR services, and telephone landlines.
Analysts predict that the number of subscribers will decline this quarter, but due to a lack of housing, not cord-cutting. With fewer people moving into new homes or starting families due to the failing economy, there aren’t as many new households to sign up. In its earnings report, New York City cable provider Cablevision estimated that the number of occupied homes in its service area had declined in the past year.
Despite all of this, the picture isn’t looking as grim as expected for cable companies. Their losses from cord-cutting and fewer new subscribers are being made up for with more customers signing up for broadband subscriptions and business services. And, in general, the number households who pay for cable TV—currently at about 100 million, says the Times—has remained steady. “When you think about it,” said Time Warner Cable CEO Glenn Britt in an earnings report, “nearly everyone watches TV, and they watch a lot of it.”