Consumers cut pay-TV service for Web-based programming

Nearly every pay-TV provider is leaking subscribers.

The nation's largest cable company, Comcast, lost 238,000 TV subscribers in the second quarter of this year; and No. 2 Time Warner Cable lost 130,000. Satellite TV provider Dish Network lost 135,000 subscribers. Its larger competitor, DirecTV, added 26,000, but that's down from the 100,000 it added in the second quarter last year.

Obviously, one of the primary drivers of cord cutting is the nation's economic woes. The unemployment rate is stuck at 9.1%, and U.S. economic growth slowed to 1% in the most recent quarter. "People that are unemployed or underemployed … have to cut their expenses," says Norm Bogen, analyst at market research firm In-Stat, "and one of the things they can cut is their pay TV." But there's also tumultuous change going on in the TV business. The number of U.S. homes with traditional TVs has dropped slightly, from 115.9 million to 114.7 million, says Nielsen Media Research. Yet, total TV viewing is on the rise, because more viewers are watching Internet-delivered video on a PC, tablet computer or smartphone, Nielsen says. As Internet video options evolve, an increasing number of pay-TV customers are dropping their service or sliding to a lower tier of service — and using the Web to get their entertainment content. Some are adding antennas to watch local channels live via free, over-the-air digital TV signals.