Cutting the Cord

As a poor college student, I pinch pennies whenever I can. That means Sunday night dinners at Cici’s Pizza, clothes from Target, and those god-awful compact fluorescent bulbs in my lamps.

It also means I won’t pay for cable. Not only would it be an unjustified expense to buy a bunch of channels so I can watch a few shows, but I simply don’t like to build my schedule around my television viewing. With options like DVDs, iTunes, Hulu, and soon Google TV, the benefits aren’t worth the cost.

It would appear that I am not the only one who thinks this. Cable subscriptions are dropping. Time Warner Cable forecasts a “subscriber deficit” for the third quarter, an announcement which led to a three-percent drop in TWC stock. Ivan Seidenberg, Verizon’s chairman and CEO, says such “cord-cutting” is a result of cheaper alternatives for younger, lower-income consumers who no longer desire to pay cable fees. Analyst Craig Moffett claims that this is not an issue to be concerned about yet, and that “evidence of cord-cutting remains scant.” Moffett blames the current economic condition for subscription drops, despite the fact that the recession is apparently over. (Who knew?)

Perhaps if Mr. Moffett weren’t a well-paid analyst he would realize that cord-cutting is indeed a very real occurrence among lower-income consumers. It may not be making a huge difference yet, but it would be very unwise for cable companies to ignore the potential for more frequent subscription drops in the future. Now, do I think that cord-cutting will be “the death of cable”? Of course not. People will continue to pay for cable due to the large amount of channels and shows available, but some of the poorer, less picky users will inevitably find alternatives, and cable companies may have to rethink their strategies as a result.