At the End of Their Rope

Lunghu occasionally descends from the lofty heights of sardonic commentary on world affairs to briefly opine on more mundane topics.   Today is one of those rare days, because  –for whatever reason–  a European news service has concluded that its readers might want to know about the current business climate in the U.S. cable television industry.   Perhaps they have media investors in mind, or perhaps they’re seeking signs of (further) decline in American cultural hegemony.   Perhaps a European is somehow involved.

Whatever.

US cable operators lost 741,000 basic video customers in the third quarter of the year, the biggest decline since it started tracking the segment in 1980.  Comcast lost 275,000 video subscribers during the third quarter [alone].  …  Combined with a loss of 216,000 customers in the second quarter, the first ever decline in its history, the pay television segment has fallen 2.3 percent in the last six months to around 100 million subscriptions.

Predictably, industry executives are whistling past the graveyard.

“I think there’s much ado about very little in terms of all the talk about cord cutting.  I think it’s remarkable that in the teeth of a powerful recession … that continued viewership of subscription television held up as well as it has,” said Philippe Dauman, president and chief executive of Viacom.

Others aren’t quite so captivated by the media-honcho spin.

Jeff Kagan, a telecom industry analyst, said a number of factors were behind the drop in cable subscribers, including the inability to buy channels a la carte.
“In order to raise rates annually, the cable television industry always adds more channels and [claims] it is still a good deal.   However, the average customer still watches the same 10 to 15 channels,” he said.  “Adding more channels and charging more does not make it a better deal…  It just makes it more expensive.”

Perhaps Lunghu can translate Jeff Kagan’s perspective into language that a media executive can understand, by way of analogy.   Cable companies are somewhat like chicken farmers, but they have a very special way of selling their chickens and eggs to consumers (don’t ask which came first).   Whether the customer wants chickens or eggs, she must also buy the chicken manure that was generated during its production.  (It’s some kinda green/carbon capture strategy.)  When the customer begins to complain that the price of chicken is too high, the farmer offers her the same amount of chicken and a few more eggs, along with lots more manure all wrapped up in a slightly larger market basket.  And madame can only use a little bit of manure as garden fertilizer…

Fortunately, there’s a Frenchman at the helm of the good ship Viacom.   As long as he’s not the secret mastermind of some dastardly Gallic plot to undermine and destroy American dominance of the popular culture/propaganda industry (it’s always possible), we may yet see U.S. cable providers reach a modus vivendi with the public they claim to serve.   Lunghu isn’t counting on it, which is why he is one of those former Comcast customers.   Life without television has been much more enjoyable.

Lunghu occasionally descends from the lofty heights of sardonic commentary on world affairs to

briefly opine on more mundane topics.  Today is one of those rare days, because –for whatever

reason– a European news service has concluded that its readers might want to know about the current

business climate in the U.S. cable television industry.  Perhaps they have media investors in mind,

or perhaps they’re seeking signs of (further) decline in American cultural hegemony.  Perhaps a

European is somehow involved.

Whatever.

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