Peter Kafka

Recent Posts by Peter Kafka

Big Cable Braces for a Lousy Quarter

Time to get the cord-cutting headlines out again. The big cable and satellite companies are about to report their quarterly numbers, and Bernstein analyst Craig Moffett says it will be “dismal” for pay TV growth.

Moffett expects to see the cable guys like Comcast and Time Warner Cable lose a total of more than 300,000 subscribers, while the satellite TV companies may eke out about 70,000 new customers.

Those results could be balanced out by growth from the TV services offered by AT&T and Verizon, who have added 412,000 new subscribers. And overall pay TV numbers could end up positive for the quarter, but Moffett says that’s no sure bet at all: “Our conviction in a positive aggregate number is all but zero.”

Moffett is quite skeptical that pay-TV customers are actually cutting the cord and satisfying their TV needs with Netflix, Hulu, etc. For quite some time he’s been arguing that pay TV growth is a function of new household formations — and since there’s none of the latter, there can’t be any of the former.

Again, note that Reed Hastings and the rest of the Netflixers have been diligently announcing that they don’t believe there’s cord-cutting either — and if there is, they’re certainly not contributing it. But there are a lot of people who will see the next few weeks’ numbers as evidence that cord-cutting is, indeed, for real.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik