Time Warner Cable is blaming its awful Q3 earnings on CBS: The cable company lost 306,000 TV subscribers in the period after CBS pulled its programming from TWC’s systems in a fee dispute.
But the numbers contain the glimmer of something scarier for the cable and broadband supply businesses: Time Warner lost internet subscribers, too — 24,000 of them. Analysts were expecting a net addition of internet subs, 46,100 of them.
That’s a rare phenom: We’re used to seeing “cord-cutters” give up or never subscribe to expensive TV packages.
What we’re not used to seeing is cord-cutters who don’t want to pay for web-only access either.
It used to be the assumption that cord-cutters gave up paying for cable TV but transferred their subscriptions to telco companies like Verizon and AT&T who supply TV as a bundle with internet. People want the internet; TV is the icing on the cake. Mainly, cord-cutters just want the internet so they can watch TV on Hulu, YouTube, Netflix and HBO Go.
Doubtless Time Warner’s loss of web subscribers is in large part the result of customers transferring their bundled subs to other companies. Indeed, TWC lost 429,000 subscribers over all.
But there is something else going on here, too: It’s increasingly easy to watch TV and access the internet without any kind of cable or internet service provider. Consider:Fifty-seven cities in the U.S., including Los Angeles, offer free wifi. Facebook and Cisco have joined to offer free wifi access to customers in any business who check in to Facebook. Facebook’s original free wifi test included just 25 stores in the Bay Area. The company has now expanded it to 1,000. The mayor of Seattle is trying to provide his city with low-cost broadband internet access, to compete with high-priced services like those from Comcast. It’s getting easier to exist on free wireless and wifi access alone. New companies like Scratch offer mobile phones that exist only on free wifi.
If you’re reading Business Insider, you’re probably the kind of wired-up, higher-income customer who wouldn’t dream of giving up internet access at home. But a huge portion of the population isn’t like that. Consider college students. Or my mom. Students get their wifi from campus. They can use their phones off campus. My mom uses the internet for all sorts of things, but mostly she’d be fine accessing it on her laptop at the local coffee shop a few times per week.
A colleague told me yesterday she survived just fine all summer without the internet, due in part to free wifi that’s cropping up all over the place.
It is not the case that the cable and internet giants are facing imminent death from a mass of cord-cutters. But it ought to be a terrifying prospect for their strategy executives: What is the point of being a cable or broadband company in a world where it is increasingly easy for consumers to get by without either?
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