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Summary:

We know that Comcast is losing cable subscribers en masse. What we don’t know is what makes them cancel: Are these cord cutters ready to switch to Hulu? Or are we talking about victims of the recessions who just can’t afford HBO and Showtime anymore?

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A lot has been written about Comcast losing 275,000 of its cable subscribers during the third quarter. Our own Ryan Lalwer thinks this is clear evidence of cord cutting as a result of rising cable bills. Others disagree, arguing that customers are simply switching to other forms of pay TV.

And then there is Sanford C. Bernstein analyst Craig Moffett, who has his own theory about cord cutting. From the New York Times:

“Mr. Moffett said the image of the cord-cutter had been that of a ‘cutting-edge technologist’ who preferred to bypass cable to watch programming on computers and on an ever-proliferating array of devices. ‘The reality is it’s someone who’s 40 years old and poor and settling for a dog’s breakfast of Netflix and short-form video.’”

Karl Bode over at DSL Reports already made fun of Moffet today, but we’d like to cut through the polemic from both sides for one second and ask: Is cord cutting an economic trend, or is it about the growing availability of programming online? Or maybe the choice doesn’t even matter, as people who have to save money leap-frog the mainstream to become technological trendsetters by necessity?

We’re interested in your take on this matter, and we’d also like to know about your personal motivation to cut the cord, if you’ve done so. What was the driving factor: Hulu or your wallet? Please chime in below — and while you’re at it, enjoy the most recent episode of our new show Cord Cutters…

Image courtesy of Flickr user Bede Jackson.

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  1. I’m one of Comcast’s cord cutters and while the money was certainly part of why I quit, the other options in my life is what enabled me to quit. With an over the air antenna, a TiVo and a Netflix membership, I’ve been able to more than replicate the cable experience at 1/5th the cost of what they charge. It’d be one thing to argue that this is a temporary phenomenon if people were migrated from cable and to lower cost options like Dish, but it’s hard to find saving $10 a month and still using pay tv, when it’s so easy to save $60 per month and get most of the same content. Without the ability to time shift my ota hdtv, there’s no way that I would have cut the cord, but when you complement access to the big networks with the Netflix subscription, it gives me way more TV than I can handle. I’m not sure that I’d call myself a hipster, but considering what I spent to install cat6 ethernet and the number of different hardware devices that I have, I’m not sure that I’d equate my viewing experience to dog food.

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  2. People have more than one motivating factor. My driving factors are both – content and price. My set up? Laptop to TV, homepage with hulu, netflix and Apple TV for my new rental releases. Bluetooth keyboard and pad are ideal to control all of the above. This set up is my all-in-one solution (and I still think it’s better than upcoming set top boxes and smart TVs).

    I don’t watch cable because pricing is out of control and doesn’t offer me quality content I can’t find elsewhere.

    My content, when I want it, costs me $9.99 a month plus any rentals through Apple TV. I win.

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  3. I am getting ready to cut the cord to Comcast cable tv for multiple reasons: 1) Ridiculously overpriced service for the 5 channels I actually watch; 2) Their onDemand service has a horrible interface and is very overpriced compared to Netflix’s watch instant offering for $9.99/mo, yet OnDemand is their flagship product that they use in marketing to justify the prices; 3) I could care less about 80 sports channels (just my personal disinterest); 4) The DVR rental add-on of $15/mo for the box and the world’s worst DVR interface (it’s not even close to TiVo’s interface); 5) 90% of the shows I’m interested in are available on the Web, and the other 10% I can live without until they make it onto Netflix.

    I could go on.

    And don’t get me started on Comcast’s $44+ a month for VOIP service (if you are not in a temporary/promo bundle).

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    1. @Metroknow: Couldn’t agree more. I have the exact same reasons, but haven’t cut the cord yet.
      1) $140/mo total for watching HGTV, FoodNetwork, Bravo, and the major networks…
      2) Their VOD service frequently fails in my area at peak times.
      3) Ditto. I don’t need ESPN “The Ocho”.
      4) The DVR has actually gotten worse. Mine freezes when rewinding.
      5) If the wife could just forego HGTV, we’d be off in a second…

      Their pricing is for the sheeple, but pretty soon, that won’t work anymore with forays by Apple and Google into this space.

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      1. Word for word, channels and all – we are in complete alignment :)

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  4. I’m always amazed by this debate. Anyone sitting in front of a bunch of RSS feeds, DSL report websites etc.. is by their very nature fairly forward thinking and quite comfortable with new technology.

    Of Comcast’s 24M subscribers – how many of them do you think can be characterized as such?

    Of course some people are cutting the cord to go to over the top services – and equally – many are cutting the cord because cable is just way expensive and they can’t afford it. With almost 10% unemployment – which is far worse in cities and among the young – this is no real surprise is it?

    I haven’t read the transcript (but I will) to see if the key question was asked:

    How many of the 275K basic video subscribers (the lowest man on the Comcast food chain) dropped basic video – but kept their broadband service up and running? Add this number some estimate of how many people cut off video and went to a DSL service (probably an extremely small number considering ATT and VZ’s net adds in digital) – and you likely have a somewhat high guess as to true cord cutters.

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    1. Very astute analysis.

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    2. You are right in assuming that not all of the 275K who dropped Comcast basic video “cut the cord”. But I disagree with needing to switch Internet service in your definition of “cord-cutter”. I see them as people who have cancelled their cable/satellite TV subscriptions and consume their video another way, whether it be over the internet, over the air, or redbox. Necessitating that you cut your internet service in addition to video will under-estimate the true number of cord-cutters, especially in markets where cable is the only high-speed internet option.

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  5. I’m a DirecTV cord cutter and I liked DirecTV’s service, but it was a ripoff. To watch the dozen or so shows we liked, we were paying $110/month, when 90% (kid’s shows in particular) were available via Netflix, AppleTV or terrestrial for a fraction of the price. The only things we miss are HBO (The Pacific and Entourage, which eventually get to DVD) and Friday Night Lights’ last season, which will be on NBC next year. So everything we watch is available (with a couple delayed a few months), for about 15% of what we were paying. However, I didn’t cut the cord to save particularly, but rather because it no longer necessary and encouraged excessive TV watching. We now read a lot more, and so do our kids. A win-win, as they say.

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  6. Cord cutting absolutely a mix of both. It’s all about the value proposition. It’s not that cable TV isn’t a good product, it’s that you’re forced to pay for channels that you don’t want. Why would you buy Cable, HBO, Starz, and Showtime for $130/mo when you can go over the air, add Netflix and Hulu and pepper in iTunes purchases for less than $40/mo?

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  7. My family cut the cord when I was laid off in 2009. I got a job 4 week later but never added cable back. We had U-Verse and it was worthwhile to save $65 a month. We budget a certain amount for VOD from Amazon, but rarely do we spend more than $12 a month on such purchases. We also have Netflix. Over the air TV is good enough for local football and March Madness. Monday Night football on ESPN sucks, but I’ve learned to live without it.

    My wife only wishes she could get HGTV and FoodNetwork. She would pay $15 a month subscription for a bundle of those two channels on a Roku app/channel.

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    1. x2

      We got rid of cable to save money. Also, with small kids, it’s nice that we can provide the Disney and Nick programming to them without commercials via Netflix streaming + public library DVD rentals. I just put an antenna on my roof for OTA which provides plenty of good stuff.

      Maybe they should provide a metered-cable-tv option that would be attractive to people who only watch a few hours a week. :)

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  8. Just dropped my Comcast cable subscription. I now use PlayOn to access Hulu, Netflix, and several other channels through my XBox. It works extremely well and costs about 1/5 of what cable was costing. The only thing I haven’t figured out is how to watch the Saints games. :(

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  9. For some years I’ve tried to stay away from watching too much TV, and as I am a tech type I predictably have leaned towards internet consumed media (including tv/movies via the web) rather than TV consumed media…

    Which is why I haven’t subscribed to cable for a number of years. But, recently my local cable provider called me up (whom I get my internet off) and offered me 6 months of cable TV for free ($1/month actually). After the first week of getting myself re-acquainted with cable TV I basically didn’t bother watching it again for the remainder of the 6 months – most of the stuff on TV is crap and I don’t feel like organizing my life around those few shows I would watch.

    On-demand internet streams are obviously better in my opinion.

    I ended up cancelling my free cable after a few months of non-usage and I’m confident I will never again subscribe to cable/satellite TV ever again – it just seems like a waste of money and time.

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  10. There is a third factor. Replacement of TV time by social media. Facebook is a huge time consumer for many folks. Those are hours people are not watching TV at all. Don’t diminish the effect of online activities that lowers the overall value of cable TV. If the price were high before, then if you watch just 10% less each month, the value prop gets so much worse.

    The value of TV as a cure for boredom has gone down and its making these cut the cord conversations much easier to have.

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    1. Or World of Warcraft.

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