2023 could be the year that puts the final nail in the coffin for many cable TV providers, including Comcast and Charter. A perfect storm is brewing that is making cord cutting even more attractive to millions who have held out with cable TV.
We have already seen this storm building with a huge increase in the number of Americans canceling cable TV in the 3rd quarter of 2022.
These three factors created the perfect cord cutting storm for Comcast and Charter.
Inflation
The number one reason new cord cutters cancel cable TV has always been to save money. With inflation making almost everything more expensive, especially many of the everyday necessities like food, gas, and utilities, more expensive cable TV has become a luxury many cannot afford anymore.
Now, many cable companies, including Comcast, have announced price hikes for 2023.
As inflation continues to grow, it has left many Americans looking at their cable TV bills and asking if they are really worth it. For many of them, the answer recently has been no and more are likely to say no.
Internet Options
For years now, many have said companies like Comcast and Charter would be fine as they are the only option for home internet, something needed for streaming services. But the growth of broadband subscribers has not grown as expected.
Increasingly there are more options than ever for home internet than ever before. These options include new services like SpaceX’s Starlink and wireless home internet from places like Verizon and T-Mobile, along with companies like Amazon working on launching their own home internet service.
A few years ago, you were lucky to have two or three options for home internet. Now a growing number of areas have five or more services to pick from. Studies have shown that as more options enter a market, pricing often goes down and data caps go up or disappear all together.
Well, we are still very much in the early stages of the long-dreamed-about home internet revolution. Its impact on the bottom line of places like Comcast and Charter has started to show up in their quarterly earnings.
No longer can Comcast and Charter just sit back and expect cord cutters to pay for expensive home internet, as for many, they now have real options.
Rising Costs of Operation & Content
This is likely not a surprise, but Comcast and Charter have not been immune from some of the same pressures homeowners face with inflation. Not only do they have to pay more for content, but Comcast and Charter also pay more for power, fuel, etc.
The other main issue for Comcast and Charter is content owners wanting more from their content. Now that companies like Paramount have their own streaming services, there isn’t the drive to agree to favorable deals with Comcast or Charter like there was in the past.
There have been multiple reports that the price of content for many popular channels, especially sports networks, have gone up by more than expected amounts.
This combination of higher-than-expected content costs and inflation will likely force Comcast to raise its price, pushing more to consider cord cutting.
In the end, Comcast and Charter face a very hard 2023 if things continue as they are.