Internet TV killing cable subscribers - By: Paddy Chang

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The Time Warner Cable company (TWC) which is the second largest in the US has revealed that during the 4th quarter of 2008, it lost 119,000 customers. This is a massive increase in the loss for 2007 and much more than expected. And part of the blame is being pointed to online TV streams
Time Warners CEO Glenn Britt had warned that they were seeing a significant slowdown in subscribers. But even with Britt’s gloomy forecast, analysts had expected more in the region of nearer 50,000 reduction in subscriptions. The year closed with TWC having around 14.6 million customers using one of its services.
In light of the economic downturn, TWC revealed that it is planning a cut of 1,250 employees in a bid to cut costs, giving a loss of around 2.7% of its existing 46,000 employees.
We are seeing the first shockwaves from the recent economic downturn, but maybe not the last. It was expected that cable companies would be able to ride out the economic slump, but now all eyes are on Comcasts earnings report due on February 18th.
Time Warner added 175,000 revenue-generating units combined voice, video and data subscribers in the fourth quarter, one of its lowest tallies in years.
Citigroup cable analyst Jason Bazinet said in a note last week TWC’s RGU growth missed his estimates by 64% and â€œraised questions.
Bazinet said that despite Britt’s earlier warning, the sheer magnitude of the net add miss caught us by surprise. The actual net adds missed our estimates by a wide margin in every category: analog, digital, data and voice.
Interestingly Britt has portioned part of the reason for the decline in subscribers on customers leaving cable and watching online TV free of charge.
He has been opposed to networks streaming content online for free whilst charging cable companies to broadcast the same content. He described it as a “self-defeating system”.
Britt further commented:- In other words, free wins. If we don’t have a customer, then the programmers don’t get paid for the customer that we don’t have anymore.
Plans for this year include adding to its existing 57 High Definition TV channels and concentrating on expanding its Hispanic channels.
I dont think that will be enough to stop the slide. Cable companies need to get in tune with the market and embrace internet tv. It is the future and those that refuse to adapt will die.

The US is experiencing a massive spurt in the number of online TV and video streaming viewers. Comscore have released details of the December 2008 ‘comScore Video Metrix’ showing a massive rise in internet tv viewing amongst US viewers. A mammoth 14.3 billiobn streams were watched from websites such as Youtube (49% of viewers) Fox, Yahoo, Viacom and Hulu.

The rise from November 2008 was an amazing 13% in one month. Youtube in particular has increased in popularity showing 5.9 billion videos watched. Fox Interactive came in second showing 445 million videos (3.1%), then came Yahoo showing 330 million (2.3%) and Viacom who managed to show 291 million (2.0% market share). Hulu managed to rank in a dissapointing 5th position with 241 million videos watched, although this was a 6% rise over it’s November stats.
Interestingly though, Hulu managed to come first in duration of watching streams with an average view time of over 10 minutes per viewer. YouTube managed an average view time of only 59 seconds.
IF you love your stats then you will also be interested in knowing that in the US, around 150 million viewers saw on average – 96 videos each in December 2008.
More interesting facts that emerged from the report:-
* 78.5% of the US Internet users watched videos.* On average each internet tv user saw 309 minutes of video (over 5 hours each).* 98.9 million Youtube users saw 5.9 billion videos (59.2 videos for each user).* 48.7 million users saw 367 million videos on MySpace (7.6 videos for each user).* The duration of the average video stream was 3.2 minutes.* Hulu won the duration test with an average of 10.1 minutes, which came out longer than any of its top ten rivals.
Youtube still reigns supreme, with an astonishing 2 out of every viewer going to their website. There flaw is in the fact that viewers dont seem to stay that long and this is where Hulu wins out.

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