A bad first quarter is notable for the industry because that’s when it is usually the strongest. The industry added an estimated 445,000 subscribers in Q1 of 2012, and 470,000 in Q1 of 2011. But even with additions from satellite and phone companies, this year’s first quarter was only up around 194,000 – not enough to make up for previous-quarter losses.

From April 2012 to March 2013, the industry lost a total of 80,000 subscribers, according to Leichtman Research. That’s the first time the research company has ever seen subscriber losses over a 12-month-period, leading president Bruce Leichtman to this assessment:

“First-time ever annual industry-wide losses reflect a combination of a saturated market, an increased focus from providers on acquiring higher-value subscribers, and some consumers opting for a lower-cost mixture of over-the-air TV, Netflix and other over-the-top viewing options.”

That’s quite a statement, especially considering that Leichtman has been an outspoken skeptic of the cord cutting phenomenon. In a 2010 New York Times story, he famously called cord cutters “really just a bizarre breed of people, usually in New York or San Francisco, who don’t watch a lot of television in the first place.”

Three years later, he rightfully cautioned that the numbers don’t necessarily point to a “more dramatic near-term market decline,” even though we can expect further losses in Q2. But there’s reason to be nervous, and a closer look at Leichtman’s numbers shows why:

Cable has been bleeding for years, and it’s no surprise to see this continue – even though many had expected a stronger showing for Comcast and Co. But really concerning is the slowing growth in the satellite TV segment, which is where price-conscious consumers have been fleeing to in previous years.

DirecTV added 184,000 subscribers in Q1 of 2011, and 81,000 in Q1 of 2012. This year, it only gained 21,000 new subscribers in the same time frame. Things didn’t look better for DISH, which dropped from 104,000 subscribers in Q1 of 2012 to 36,000 in Q1 of 2013.

That’s a sign that people aren’t just looking for a cheaper pay TV option anymore, but actually want to get rid of the traditional pay TV bundle altogether.

Image courtesy of Flickr user Jason Rosenberg.

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• Who and what to watch in the new era of the living room
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“Every channel has a 14-day free trial, and many offer discounted yearly rates. For example, Sesame Street will be offering full episodes on their paid channel when it launches. And UFC fans can see classic fights, like a full version of their first event from UFC’s new channel. You might run into more of these channels across YouTube. Once you subscribe from a computer, you’ll be able to watch paid channels on your computer, phone, tablet and TV, and soon you’ll be able to subscribe to them from more devices.”

Partners include The Young Turks, UFC, Jim Henson Company, Mark Cuban’s HDNet and the Sesame Workshop. Not all channels are live yet, a first list of 53 initial launch partners can be found here.

Some of the new partners should come as no surprise to paidContent readers: We reported earlier this week that YouTube’s employees have been testing paid channels for the Sesame Workshop, Baby First TV and Cookie Jar TV for months.

YouTube said Thursday that it wants to make subscriptions available as a self-serve feature to select partners soon. Asked how big of a cut YouTube is taking from subscription fees, a spokesperson told me that partners get to keep “the majority share,” without elaborating further.

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• Connected Consumer 2011: What Not to Expect
• Connected Consumer Wrap-up: Q1 2009
• How consumer media will change in 2013

Show notes for this episode:

• Plair is available for $99 online. More information about the device can be found on Plair’s website.
• Plair isn’t the only one looking to bring AirPlay-like features to other devices. Netflix and YouTube are working on an open standard for this kind of feature as well. Check out our report.
• Don’t forget our e-book Cut the Cord: All You Need to Know to Drop Cable to learn more about various devices that help you to get rid of cable. The book is available for $5 on Amazon, Barnes & Noble and iTunes.

Are you interested in a device like Plair? Or are you using any of the other methods to beam content to your TV? Let us know in the comments below, get in touch with us on Twitter (@cordcutters) or email us at cordcutters @ gigaom.com. Also, please check out our new Google+ Cord Cutters community!

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Who and what to watch in the new era of the living room
• Why HBO’s TV Everywhere Economics Don’t Make Sense
• Connected Consumer 2011: What Not to Expect

Cord Cutters are a growing tribe, according to research from The Convergence Consulting Group. I cut the cord in 2008 and five years later have relied solely on non-linear video for my video fix.

PS:  Here is a link to our coverage of cord cutting trend. We also host a video podcast that focuses on cord-cutting trends, technologies and gizmos.

Featured photo courtesy Shutterstock user Mikhail Melnikov.

Instead of watching Game of Thrones via an a la carte HBOGo subscription, they’ll face higher fees for content aggregators like Netflix and Hulu and will find more content inaccessible unless they have a pay TV subscription, he thinks. Even Hulu’s backers have toyed with making the site accessible only to those who have a pay TV subscription.

“The whole industry is doing a lot of experimentation in places and markets where they are trying to figure out what will work for the U.S. market,” said Feher, who prior to the top job at Conviva was the CTO of NBC-Universal responsible for activities such as streaming the Beijing Olympics. “But before that, in the next 12 months there will increasing pressure against cord cutters. The whole authentication thing, where you can’t watch content unless you have a cable sub, will be a mess for consumers.”

In short, while Nordic viewers get their HBOGo a la carte, those of us in the U.S. may have to wait, no matter how many webcomics and industry insiders demand it. Even vague suggestions from HBO executives are compromises that limit the experience to an app.

However, there’s a light at the end of the tunnel, according to Feher. “Inevitability consumers will tell content creators what they want and the content guys will have to respond. There’s a whole upcoming generation of ‘cord nevers’ that the industry has to consider.”

For example, he notes that while many in the industry expected online viewership of the Super Bowl to be lower that it was, given that it was a weekend and people tend to have parties where they cluster around the big screen TV to watch it. He and others were surprised at how many online watchers there were and how many came from sites with an .edu address.

“No one brings a TV to college anymore, and so it’s logical to ask if they will ever want to watch outside of this way they’ve gotten used to,” said Feher. “But in the short term there will be a lot more pressure on aggregators like Netflix and Hulu, and the consumer will feel that in less content or higher prices.”

The challenge for the industry is complex, and is one where technology is pressuring business models designed for the old way of delivering television — multicast from one to many over a guaranteed and pay-TV-provider-controlled connection. The internet has made viewing content more of a one-to-one proposition and the rise in over the top services and multiple devices on which to watch the content has made the entire experience disjointed.

Conviva has stepped in to ensure video quality in this brave new world with software that parses a lot of data in the cloud and has software agents that make decisions about how to adapt the video in response to problems. If the internet is congested for example, it may route content via a different route. If the video is buffering in your home because your Wi-Fi is wonky it may drop down to a lower bit rate.

But outside of technical solutions, Feher also thinks there’s a business model that will help content companies and broadcasters make money so they can avoid “trading analog dollars for digital pennies,” as NBC-Universal’s Jeff Zucker (and Feher’s former boss) has said. It may be a matter of charging people more money for HD streams or even more for 4K streams that require a whopping 25 Mbps connection. ISPs are trying to build this level of granularity into their billing systems and networks.

It might also be as simple as using the targeting abilities available in the digital world to better monetize a viewer by showing him or her more relevant advertising or charging different prices for a la carte content. Essentially he’s proposing that the data driven model we’re seeing drive success in other industries takes a stab at changing television. I hope the results are worth watching.

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• Connected Consumer Wrap-up: Q1 2009
• Controversy, courtrooms and the cloud in Q1
• Q4 Wrap-up: SOPA and the future of digital content

Show notes for this episode:

• The Roku 3 is available for $100 online, and will come to retail stores some time in April. More information about the device can be found on Roku’s website.
• Roku 3 comes with apps for most major content providers, but still doesn’t have its own YouTube app. Check here to learn how to play YouTube videos on Roku.
• Check out our e-book Cut the Cord: All You Need to Know to Drop Cable to learn more about various devices that help you to get rid of cable. The book is available for $5 on Amazon, Barnes & Noble and iTunes.

What’s your take on the new Roku, and especially the headphone jack? Worth a buy, or just a gimmick? Sound off in the comments below, get in touch with us on Twitter (@cordcutters) or email us at cordcutters @ gigaom.com. Also, please check out our new Google+ Cord Cutters community!

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Connected consumer third-quarter 2012
• Over the top in 2012: trends and technologies to watch
• Who and what to watch in the new era of the living room

Show notes for this episode:

• The WD TV Play is available on the WD website for $69.99. There’s no word on when the device is going to reach stores yet.
• The device comes with a different UI than existing WD players, and supports slightly fewer codecs – MPEG-2 and DTS aren’t supported.
• One other notable difference: The WD TV Live and the WD TV Hub pull in metadata for local content, the WD TV Play doesn’t.
• Check out our e-book Cut the Cord: All You Need to Know to Drop Cable to learn more about various devices that help you to get rid of cable. The book is available for $5 on Amazon, Barnes & Noble and iTunes.

How important is the availability of a YouTube app for your device choice? How about local content? And what about that remote? Tell us what you’re looking for in the comments, get in touch with us on Twitter (@cordcutters) or email us at cordcutters @ gigaom.com. Also, please check out our new Google+ Cord Cutters community!

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• What the shift to the cloud means for the future EPG
• Connected consumer third-quarter 2012
• Over the top in 2012: trends and technologies to watch

Show notes for this episode:

• Netflix is going to release the entire first season of House Of Cards on Februar 1. Check out the show page on Netflix.com for more details.
• You can read our previous House of Cards coverage.
• Check out our e-book Cut the Cord: All You Need to Know to Drop Cable to learn more about various devices that House Of Cards and other Netflix content is available on. The book is available for $5 on Amazon, Barnes & Noble and iTunes.

Are you going to watch House Of Cards? Is original programming like this making Netflix more valuable for you, or would you prefer if the company spent its money on other content instead? Please share your thoughts in the comments, get in touch with us on Twitter (@cordcutters) or email us at cordcutters @ gigaom.com. Also, please check out our new Google+ Cord Cutters community!

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• How consumer media will change in 2013
• Controversy, courtrooms and the cloud in Q1
• Q4 Wrap-up: SOPA and the future of digital content

Show notes for this episode:

• More information about the Cloud TV Box can be found on the Sungale website.
• The device is baed on Android, much like Google TV. However, UI and functionality are quite different. Check out our coverage of the most recent Google TV update.
• Check out our e-book Cut the Cord: All You Need to Know to Drop Cable to learn more about various streaming devices, including Google TV, Roku, Apple TV and more. The book is available for $5 on Amazon, Barnes & Noble and iTunes.

Would you be interested in an Android-based streaming box – and what kind of features would it need to make you buy one? Please share your thoughts in the comments, get in touch with us on Twitter (@cordcutters) or email us at cordcutters @ gigaom.com. Also, please check out our new Google+ Cord Cutters community!

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Connected Consumer 2012: A year of consolidation and integration
• Report: Monetizing Digital Content
• Connected Consumer Wrap-up: Q1 2009

Show notes for this episode:

• Roku is available starting at $50. Check out Roku’s website for more info, or take a look at our review of the current-generation Roku hardware.
• Apple TV costs $99. More info on Apple’s website, or check out our recent Apple TV coverage.
• Boxee TV is available for $98. Check out Boxee’s site for more info, and make sure to read our first impressions of the device.
• The Vizio CoStar costs $99. More info on Vizio’s website, or check out our video review of the device.
• The Mohu leaf costs $40. Here’s Mohu’s website, and don’t forget to activate your antenna once you bought it!
• One last tip: Our e-book Cut the Cord: All You Need to Know to Drop Cable is just $5. Give it as a gift, or buy it yourself if you want to get ready to save some money and have more fun watching TV next year. The book is available on Amazon, Barnes & Noble and iTunes.

What kind of cord cutting gear is on your wish list this year, and what kind of gifts are you getting your loved ones?Please share your thoughts in the comments, get in touch with us on Twitter (@cordcutters) or email us at cordcutters @ gigaom.com.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Connected Consumer Wrap-up: Q1 2009
• How consumer media will change in 2013
• Controversy, courtrooms and the cloud in Q1