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How Cable Companies Are Fighting Back Against Cord Cutting

Daily Ticker

They want you back – well some of you, at least.

Cable giants Comcast (CMCSA) and Time Warner Cable (TWC) have rolled out new, lower cost television packages aimed at wooing back some of the millions who aren’t subscribing, the so-called cord cutters.

Time Warner Cable is selling a small group of mostly local broadcast channels plus HBO for $30 a month. That’s a pretty good package for a viewer who loves shows like Game of Thrones or Boardwalk Empire that aren’t really available elsewhere. Still, the package doesn’t include charges for a cable box and other monthly add-in fees. And cord cutters who get most of their video fix online from Netflix (NFLX) or Hulu will still need Internet service.

Comcast’s package might make more sense for the kind of mostly-Netflix, occasional-HBO watching subscriber. It costs $40 to $50 a month depending on the market and includes local channels, HBO plus Internet service.

Neither package includes sports channels like ESPN. Live sports programming remains one of cable’s biggest attractions for many viewers.

Why are the cable companies, which have resisted offering their channels a-la carte for years, suddenly cutting prices? As I discuss in the attached video with Lauren Lyster, HBO is attractive enough that even many folks who hate cable still wish they could keep up with the adventures of Larry David or Daenerys Targaryen. They’ve been pining for an online only option – a plan to pay just for HBO to watch via the channel’s amazing HBO Go app.

These new plans could lure some back to cable and help the industry nip the cord cutting phenomenon in  the bud while it’s still relatively small. Over the past six months, the pay TV industry lost about 500,000 subscribers, according to analyst Craig Moffett, just a drop in the bucket of the roughly 100 million total subscribers but one of the worst stretches in cable history. Until 2010, the industry never had a quarter of net subscriber losses.

If the carrot approach doesn’t work, cable companies have also been rolling out the stick – i.e. data usage caps that require customers who download lots of data to pay more. Streaming Internet video uses up lots of data, even more as Netflix and other services have added high definition programming.
One way or another, they’re going to get you. At least that’s the plan.

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