How do cable companies make their money? Years ago, you would have quickly answered that question with a single phrase: by selling cable television. That answer is incorrect today.
In fact, recent research indicates that, for the first time ever, there are more cable broadband subscribers than cable television subscribers: 49,915,000 to 49,910,000, respectively. In other words, you could say that cable companies are making more money on broadband than actual cable. And if that’s not the case at this exact moment, it’s likely only a matter of time before it is.
According to a recent report from the Leichtman Research Group (LRG), the 17 largest cable and telephone providers in the United States reported the addition of 385,000 new broadband customers during the second quarter of 2014. That number represents a 130 percent increase in subscribers brought on board during the same period last year.
Serving as a true testament of their ability to adapt to market changes, cable companies were responsible for 99 percent of those newcomers.
“With the addition of more than 30 million broadband subscribers over the past decade, cable providers have clearly expanded well beyond their roots in cable TV service,” said Bruce Leichtman, president of LRG.
There’s really only one thing that you can say about the future of content: It will be in demand.
But whether we’ll watch content through traditional television channels or via over-the-top (OTT) content providers—or a combination thereof—remains to be seen. In either case, cable companies are proving that being an Internet service provider, one that supplies the so-called pipe into and out of the home—is in their best interest.