Cable and Satellite TV Struggle With Cord-Cutting/Cheaper Streaming Options Proliferate, Including Netflix

In the race for media consumers, cable companies and satellite firms are losing millions of 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.

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.

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