Thanks to Bad Economy and Cord Cutters, Cable and Satellite TV Providers are now Losing Customers Faster Than Ever


U.S. cable and satellite TV providers lose 380,000 subscribers in Q2. 

For cable and satellite TV providers, the second quarter of 2011 was the single worst quarter in history. They lost more subscribers than ever before and competitive pressure also meant that they had to offer more and more freebies to win subscribers. Overall, Reuters reports, the U.S. pay-TV sector lost 380,000 subscribers last quarter. In the same quarter a year ago, the TV providers lost 160,000. Things are even worse for satellite TV providers, as both Dish and DirecTV reported their “first-ever quarter of combined losses of 109,000 subscribers.”

According to Reuters, these losses shouldn’t come as a surprise. Not only are consumers cutting down on cost by getting ride of their expensive cable subscriptions, but alternatives like Hulu and Netflix now enable customers to bypass their cable and satellite subscriptions altogether at a fraction of the cost of a traditional cable subscription.

It’s worth noting, though, that the most advanced networks, the Verizon’s FiOS and AT&T’s U-Verse actually added some customers. Clearly, then, there is still some demand at the high end of the market.

As for cord cutting, Reuters notes that Netflix added 1.8 million subscribers in the second quarter. While it’s still not clear how many of these are actually cord cutters, there can be little doubt that this phenomenon has contributed to the cable industry’s miserable quarter, though the weak economy surely played a much larger role.

Image credit: Nick J Webb.

9:36 pm

Paywall Coming to NYTimes on March 28: Starting at $15 per Month


The New York Times today erected an online paywall for its readers in Canada and plans to roll this system out worldwide on March 28. As had been rumored in the past, readers will be able to access 20 articles per month for free. The New York Times will also charge users of its smartphone and tablet apps, though the Top News section in these apps will remain free. Monthly subscriptions will start at $15 per month for access to the website and smartphone app. For access to the website and tablet app – but not the smartphone apps – user have to pay $20. Full access to content on all platforms will cost $35. There is no website-only subscription.

The New York Times  Home Delivery

Subscribers also get access to 100 articles from the New York Times archive every four weeks. Readers who already have a print subscription to either the New York Times or International Herald Tribune, will get free access to all of these services.

Free Access to Linked Articles

It’s important to note, that readers who come to “from search, blogs and social media like Facebook and Twitter” will be able to read all of those linked articles for free without affecting their monthly limit. Interestingly, though, the New York Times also notes that “for some search engines, users will have a daily limit of free links to Times articles.” Users coming from Google will only get 5 free articles that don’t count towards the 20 free articles per month.

Will You Subscribe or Just Find Other News Sources?

The New York Times is part of my daily news routine – both online and on the iPad. I probably read far more than 20 articles on the site per morning. I would be more than willing to pay $15 per month for blanket access to all of the New York Times’ content on all devices, but paying $35 just so I can read it on the iPad, too, is a bit steep.

The online pricing is clearly driven by the baseline price for its print subscriptions. You can currently get a Sunday-only print subscription, which qualifies for free access to all digital editions, for $30 per month (though there is currently an offer to get this for 50% off for the first 3 months). Basically, you have to pay $5 more if you subscribe to the online editions so you won’t have to deal with the print edition arriving on your doorstep every weekend.

8:18 am

More Confusion: Steve Jobs Says In-App Subscription Rules Only Apply to "Publishing Apps"


While Apple’s penchant for secrecy contributes to its mystique, it is also responsible for a kind of 21st century Kremlinology where every one of Steve Jobs’ words is carefully analyzed for hidden meanings. At times, Jobs will bypass the regular PR channels and respond to email himself. Generally, these emails clear the air when there is some confusion and with regards to Apple’s new in-app subscription program, there seems to be plenty of that going around. Just a few days ago, Apple denied an iPhone app from time-shifted reading service Readability because it offered a third-party subscription service without offering Apple’s own service at the same time – a restriction of Apple’s in-app subscription program that ensures that Apple will get a 30% cut of all subscriptions.

This was the first real test of how Apple would react to an app that wasn’t a magazine, newspaper or music service with a subscription feature. The app, of course, was quickly denied for violating Apple’s guidelines. Indeed, as John Gruber points out, it’s hard to argue that Readability does not offer a publishing service (Gruber argues that “Readability needs Apple to publish an app in the App Store. Apple doesn’t need Readability.”)

Steve & Apple Inc.

Image by marcopako  via Flickr

After this episode, a curious developer asked Steve Jobs to clarify the rules, to which Jobs replied:

“We created subscriptions for publishing apps, not SaaS apps.”

That, of course, is great to hear, but as TechCrunch’s Erick Schonfeld rightly asks, what exactly is Jobs’ definition of a “publishing app?” Schonfeld also notes that Apple’s own guidelines currently say any app that offers subscriptions for “content, functionality, or services in an app” must offer users the ability to subscribe through Apple’s own system. But these new rules – if indeed they are new rules – leave it unclear where exactly the boundary between publishing and other apps is. Does publishing only refer to text-heavy apps? What about music apps? Photo services? Do Netflix, MOG, Rdio meet Apple’s definition of a publisher? Does Flipboard? Is an app that is essentially just a gateway to content a “publishing app”?

As I said last week, I think Apple’s in-app subscription rules go a few steps too far. I hope today’s email from Jobs is a sign that Apple is reconsidering its rules and plans to loosen its restrictions.

9:39 am

Google Counters Apple's In-App Subscriptions with Cheaper, More Flexible Solution


Google just announced its new content payment system One Pass that will give publishers a very flexible and affordable option for charging their readers for access to their content. With One Pass, publishers can charge readers on the Web and in mobile apps for subscriptions, metered access, day passes, single articles and “freemium” content. Publishers will also be able to offer free online and mobile subscriptions to existing customers. Payments are handled through Google Checkout, which means Google will take a 2 to 3% cut plus $0.30 from all transactions (percentages depend on monthly sales volume).

Yesterday, I criticized Apple for looking very greedy by charging publishers a flat fee of 30% for all subscriptions. Google  clearly timed its launch as a reaction to this and offers publishers far more flexibility than Apple’s siloed program.

Google’s announcement today feels somewhat rushed given that the One Pass website isn’t fully functional yet. It was clearly in the making for a long time, though. It’s worth noting that while Apple faced strong opposition against its plan from European publishers, Google managed to garner the support of some of Europe’s largest publishers. Among the launch partners are the German Axel Springer AG and publications like Stern (published by Bertelsman subsidiary Gruner + Jahr) and the Burda/MSN cooperation Focus Online. In addition, Google also confirmed Media General (U.S.), NouvelObs (France), Bonnier’s Popular Science (U.S.), Prisa (Spain) and Rust Communications (U.S. regional publisher) as partners.

Google promises that the new system will be “simple to set up, simple to manage and simple for readers.” For now, though, we have to take Google’s word for this, as the system is not live yet. Interestingly, Google also notes that One Pass will allow users to access their content anywhere with just one login. We assume Google forgot to mention that this does not include iOS apps.

p.s. I can only assume Google gets to use the One Pass name because Continental Airline’s frequent flier program will soon be phased out in favor of United’s Mileage Plus program.

9:35 am