Competition and a weak economy plague cable TV

Cable operators all over the country have been steadily and slowly losing TV subscribers quarter after quarter. A year ago, some people wondered if Internet TV services like Netflix and Hulu were attracting so-called cord cutters. But Craig Moffett, an analyst with Sanford Bernstein, thinks there are other forces at work. Increased competition from satellite and phone companies offering TV service is the main reason that cable operators are losing TV subscribers. But the sluggish economy is also contributing to the malaise. "The category itself isn't growing, and that's a function of two things," Sanford Bernstein analyst Craig Moffett said. "First, there's almost no new household formation, so there are no newly occupied homes to serve. And second, the low-end consumer is being priced out of the market." Even though some people may be forgoing cable TV for services they can get online, the majority of Netflix and Hulu viewers are also subscribing to a paid TV service, Moffett said. "The Internet TV thesis is the sexiest [one to explain subscriber losses]," he said. "But it has the least amount of evidence to support it."