Comcast and Time Warner Cable lost 1.1 million video customers in 2013
Comcast, Time Warner Cable (TWC), and all other top cable companies lost pay-TV subscribers in 2013, but the companies were able to boost their total broadband Internet subscribers, according to research by Leichtman Research Group.
Context & Ripple Effects
The cord-cutting story is now four years old in this corpus: NewTeeVee declared it real back in August 2010 with new numbers on pay-TV defections, and GigaOM followed in 2011 by digging into why 193,000 people dropped TV in a single quarter. What the new Leichtman Research Group data changes is the scale and the scope — this is no longer a niche quarterly dip but a full-year, industry-wide loss of 1.1 million video customers across the top cable operators, including the two biggest names.
The timing matters because both losers are mid-transaction: Comcast announced its deal for Time Warner Cable in February 2014, weeks after the widely covered Comcast-Netflix peering arrangement put the companies' broadband gatekeeper role at the center of the net neutrality debate. Against that backdrop, the same report showing video erosion also shows broadband subscriber gains — which is precisely the business the merged company would dominate.
First-order effects
- Comcast and Time Warner Cable enter 2014 with a shrinking video revenue base and growing broadband bases, sharpening the case that the subscription bundle's economics are shifting toward the pipe rather than the channels.
- With the Comcast-TWC deal announced just a month earlier, these subscriber figures feed directly into how regulators and the public weigh a combination of the two largest cable distributors.
Second-order effects
- Over-the-top providers like Netflix become more dependent on, and more exposed to, the broadband incumbents they no longer pay for video distribution through — the Netflix-Comcast peering fight of February 2014 is an early skirmish over who captures value when the TV bundle fades.
- Cable operators respond by buying into the advertising layer instead of defending the channel bundle — Comcast's confirmed $320 million acquisition of the video ad firm FreeWheel points to monetizing video wherever it is watched, not only on its own set-top boxes.
Third-order effects
- If video losses keep outpacing retention tactics, the cable industry structurally repositions as a broadband utility that also sells television, concentrating gatekeeper power — and regulatory attention — on the internet pipe itself.
- A sustained shift would push content owners toward direct-to-consumer distribution, weakening the carriage-fee model that has underwritten pay-TV economics and forcing consolidation among distributors to preserve negotiating leverage.
The trend: Pay-TV cord cutting is scaling from quarterly anomaly to annual industry-wide erosion, pushing cable operators toward a broadband-first business whose gatekeeping power is becoming the real battleground for net neutrality.