Big Cable Comcast, Charter Cave On Cord Cutters, Turn To Sucker TV Subscribers Instead
For a long time, big cable companies like Charter and Comcast were trying everything to prevent cord cutters from ditching cable TV programming packages and going with internet-only offerings. Those times have passed as the big cable companies, who are also often the only broadband internet providers in an area, have become indifferent on cable subscribers and have stopped offering the discounts customers were previously accustomed to.
As the big cable companies are backing off on their discounts for plans, they are also increasing prices on their cable TV subscribers. Bloomberg mentions one subscriber who called Charter when his bill went up $40 monthly. Charter refused to offer any discounts at all, leading him to cut the cord on his TV service. The man noted that he expected at least free Showtime or HBO, but instead was offered nothing for his price increase. The reason behind this is that big cable companies are now seeing TV subscribers as expendable because when people cut the cord, they still need internet and often cord cutters don't think about the data caps that are often in place. On top of that, big cable can make solid profits on internet service.
Charter CEO Tom Rutledge made his feelings clear when he claimed, "I'm sort of indifferent." Rutledge noted that video customers aren't "a material driver" of Charter's business. Analyst Craig Moffett of MoffettNathanson LLC says that it used to be that when video customers were thinking about cutting the cord, significant discounts were thrown around, but now cable companies are just saying "Goodbye." Cord cutters still need broadband, and there are no other options in many areas. The lucrative fees for data overages that build quickly on many broadband plans when you stream lots of video mean cord cutters can often be more profitable than video subscribers.
More importantly perhaps, big cable is now focusing on what some are calling "profitable" or "high-quality" video subscribers and aren't as interested in cutting deals to keep all types of customers. Comcast CFO Mike Cavanagh says that he wants a subscriber that has "the wallet for a fuller video experience" and "really values video and our bundle despite the increases in prices." Meanwhile, satellite providers are reportedly "cleaning up the customer base" by saying bye to subscribers who insist on continuing promotional pricing when contracts expire. That's rich, literally.
Cable companies know that when people cut the cord, they usually spend more on faster internet and profit margins are then even better on broadband services. That means cord cutters are often better for business and increasing prices on the remaining sucker TV programming subscribers helps drive that growth even further.