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Will People Ever Give Up Cable TV?

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Will People Ever Give Up Cable TV?

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Will People Ever Give Up Cable TV?

Will People Ever Give Up Cable TV?

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The number of people subscribing to cable and satellite TV dropped for the first time last quarter, according to the research firm SNL Kagan. It was a small decline, due mostly to the economy. At some point, the tech talkers insist, there will be so many options for entertainment that people won't want to pay their cable bills anymore, and will be satisfied with all the other options.

ROBERT SIEGEL, host:

From NPR News, it's ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, host:

And I'm Melissa Block.

Americans have apparently been cutting the cable. Subscriptions to paid TV services dropped in the second quarter of this year. It is the first time that's ever happened. But industry watchers have been predicting this day might come - there's an awful lot of video now available for free on the Web.

And NPR's Elizabeth Blair reports that's not the only reason for the decline.

ELIZABETH BLAIR: Ever feel like you're paying for channels you don't use? I pay for dozens of cable channels I never watch. I also subscribe to Netflix, but often don't actually watch as many movies as I pay for.

Jim Willcox of Consumer Reports says I'm like a lot of people right now.

Mr. JIM WILLCOX (Senior Electronics Editor, Consumer Reports): Everywhere you turn, there's subscription for this. So if you want satellite radio, you pay that subscription. You know, you're paying your broadband. You know, people are starting to get subscriptioned-out.

BLAIR: Andre Reynolds(ph) is subscriptioned-out. He lives in Detroit. Reynolds pays monthly for satellite TV, Internet and cell phone service. He's done the math and says it's too much. He's thinking about ending his satellite subscription.

Mr. ANDRE REYNOLDS: It's coming to a point where I need to make a decision because my contract is up and I don't want to renew.

BLAIR: And he's found several websites where he can watch TV for free. So he thinks he's almost ready to cut the cord.

Mr. REYNOLDS: The only thing that really is holding me up from making that decision is to do it easily. I'm so used to just putting on the television and just taking the remote control and turning to the channels that I look at, that I want to find something that easy.

BLAIR: Reynolds says he and his wife are big fans of shows on HGTV, and once he found out that he could stream them from Hulu Plus, he got even closer to making the move. For $9.99, subscribers to Hulu Plus can stream full episodes of TV shows, current and back seasons.

Mr. REYNOLDS: I can live with $10.

BLAIR: Ten dollars is a lot less than the $72 he's been paying for satellite TV. And the analysts at the research firm SNL Kagan think the economy is responsible for this first time drop in TV subscriptions.

Analyst Mariam Rondeli says it's likely that people can't afford pricey home entertainment right now.

Ms. MARIAM RONDELI (Analyst, SNL Kagan): Unemployment rate is stubbornly high, so we think that more and more people are looking at those multitudinal packages as more like luxury items.

BLAIR: Rondeli says people losing their homes also played a role.

Ms. RONDELI: There are a lot of foreclosures. It's - you know, that we don't have a very good grab on to where these people are going. But very likely, some of them are moving back with their family members.

BLAIR: Another factor, says Rondeli, was that last year, when TV stations converted to digital, cable and satellite companies used the opportunity to offer big promotional discounts. So they saw a spike in the number of potential customers, but they didn't stick around.

Ms. RONDELI: And they signed them on with very aggressive introductory packages. And I think what they're finding now, as some of them had admitted, that some of these households are converting back to over-the-air.

BLAIR: In other words, once they had to pay full price, they were gone. This first time drop in subscription TV was small, and Rondeli does not believe the losses will continue.

But there will probably be more people like Andre Reynolds who's trying to get the TV shows he wants for free, or at least for a lot less than what he's paying now for satellite.

Mr. REYNOLDS: I think I can live without a remote control and pass it up for a mouse.

Elizabeth Blair, NPR news.

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