In the race for media consumers, cable companies and satellite firms are losing subscribers, as viewers increasingly turn to the internet for video programming, a practice that is being to as “cord cutting,” when consumers drop cable or satellite TV subscriptions. There are millions of “Zero-TV” households, in which video watchers see content on devices other than traditional TV, according to Nielsen. In particular, people aged 25 or younger often do not own televisions, but watch programs solely on devices such as smartphones and tablets. AT&T (which owns satellite service DirecTV) lost 6.19 million premium subscribers in the two-year period ending in October 2020, including 3.4 million in all of 2019. Comcast Corp. lost 733,000 subscribers in 2019.
A significant challenge facing cable and satellite companies is programming costs. Historically, they increased their subscription fees year after year in order to boost profits while covering increased costs. Some programming is extremely expensive to produce, especially sports programming (due to immense licensing fees paid to the sports leagues), and the cable and satellite firms have been passing those higher costs on to their customers.
Cable and satellite firms, along with telecom companies, are fighting back with innovations such as Comcast’s xfinitytv.com, which includes the ability for subscribers to watch recent episodes online, on-demand. AT&T U-Verse has a web site similar to Comcast’s xfinitytv.com, as well as an app that acts as a remote control and a digital video recorder. In addition, it can download programming onto mobile devices for later viewing. DirecTV’s remote-control app streams live TV programming and enables wireless devices to act as remote controls for TV viewing. DISH Network offers an automatic ad-skipping feature called AutoHop.