We're in the midst of a huge shake-up in the way consumers get their TV content, and there's no better example of that than Time Warner Cable's recent earnings report. The company reported that it lost 129,000 cable TV subscribers in the most recent quarter. That number does not include the company's high-speed Internet or digital telephone subscribers.
129,000 users sounds like a lot, but that's only 1% of Time Warner's 11.9 million served households. Nevertheless, to see a decline at all in a market that has historically been a consistent growth area is very telling.
Time Warner Cable is the second largest cable provider in the country, and in many regions it is the only option for anyone who wants premium TV service. Or at least, it used to be.
Take AT&T and Verizon. They're both very green in the pay-TV market, but each of them added around 200,000 subscribers in the previous quarter. These services typically offer lower pricing and more advanced connectivity options.
For example, both Verizon and AT&T have signed up with Microsoft's effort to bring live cable TV to the Xbox 360. Time Warner Cable has resisted, showing a typical "we're too important for that" mentality.
Moreover, there are actually consumers who have dropped their traditional cable providers entirely in favor of Hulu, Netflix, and other online video services.
For a company like Time Warner Cable, the equation used to be as the population increases, so does its subscriber base. That is simply not happening anymore, and it'll be very interesting to see how much further this shift continues.