Competition, High Bills Hurt Cable Companies

It's called cord-cutting when people give up their cable TV subscriptions because they feel they get enough to watch over the air and the Internet. Cord-cutting is a big fear for cable TV companies. But there's something new for them to worry about: Young people who never get cable subscriptions in the first place.

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OK. In the next few days, cable companies announce how they did financially in 2012. Most industry watchers expect some negative trends to continue. More people are canceling their cable subscriptions. They are called cord cutters, because they are getting TV from the Internet and over the air, not their cable cords. But they're not the only problem the cable industry needs to worry about. NPR's Neda Ulaby reports.

NEDA ULABY, BYLINE: Meet Comcast's worst nightmare.

JOE GOULD: Hi. My name is Joe Gould and we're in my apartment in Washington D.C.

ULABY: A few weeks ago, Gould rigged up a high-definition antenna to his flat-screen television and one of those boxes that lets him legally stream shows from Netflix, Amazon, Hulu, even live coverage from CNN.

(SOUNDBITE OF CNN BROADCAST)

UNIDENTIFIED MAN #1: ...Somalian forces. Obviously, people...

ULABY: Then Gould did what so people many have fantasized about. He called his cable company and said take a hike. Sure, Gould and his wife will miss watching all those hot, buzzy new cable shows. But they will not miss watching their cable bill creep up and up and up to nearly 200 dollars a month.

GOULD: We're thinking, OK, we could put a payment on a car for that much.

ULABY: The Joe Goulds of this world have cable companies so concerned, some are even using their precious commercial time to try to get people back.

(SOUNDBITE OF AD)

UNIDENTIFIED MAN #2: There's a lot of things to take advantage of with Time Warner Cable.

UNIDENTIFIED MAN #3: You can have a better TV experience too. Come back to Time Warner Cable and get up to...

ULABY: It's a little hard to track who's an actual cord cutter, like Joe Gould, and who just canceled her cable subscription because she lost her job a few years ago and had to move back in with her parents. This is what we know. About 97 percent of Americans get cable and satellite TV. Three years ago, it was 99 percent. So we're talking a one percent drop per year.

BRAHM EILEY: That's not really a big number at the end of the day.

ULABY: Brahm Eiley tracks these kinds of trends for his company, the Convergence Consulting Group. He says for the industry, this is sort of a big deal.

EILEY: People get very, very excited about these numbers but the truth of the matter is, it's still very small. And everybody's kind of been waiting with bated breath for the television to go through some form of revolution.

ULABY: Like the revolution we thought might come when the world's most powerful technology companies came stomping into the television arena: Apple TV. Google TV. Tech writer Peter Kafka is still waiting.

PETER KAFKA: None of them have gone ahead and done it so far.

ULABY: Partly because not even the mighty Google or Apple has managed to buy the rights that would let them stream sports events live online.

KAFKA: That shows you that the existing, sort of, TV industrial complex is very strong, very healthy, very hard to break down.

ULABY: So far, TV's resisted crumbling in the face of piracy. Which is, of course, a factor for lots of people cutting the cord. There's even a rising generation called nevercords. They're the young people who grew up watching TV online and hate the idea of shelling out for cable.

Peter Kafka says it's not hard to figure out how to be a cord cutter. But it's intimidating. It's almost like being a vegan in terms of who's doing it.

KAFKA: You'll notice a lot more of it I think if you're in New York or the Bay area, maybe Los Angeles, definitely college towns. You'll notice lots of people who are either eating vegan food or not paying for cable, but to assume that the rest of the country is behaving the same way is wrong.

ULABY: After all, McDonalds and the cable companies are doing just fine with miniscule drops in sales and subscriptions. Real consumer change could take decades. Neda Ulaby, NPR News.

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