Millennials have not turned their backs on cable television, however, the industry has turned its back on millennials. According to Thomas Rutledge, CEO of Charter Communications, cable TV prices have spiraled out of control and Millennials simply can’t afford to subscribe.
During his company’s Tuesday earnings call Rutledge said TV subscriptions among younger adults is slipping.
The CEO of what may soon be the second-largest cable company in the US thinks that young people are dropping cable TV because they simply can’t afford it. “You look at the demographic change in behavior and some of that is situational,” he said. “People don’t have houses, don’t have big screen TVs, don’t have money.”
Cable TV is recent years has been trounced by increasing wages as cable companies bundle together hundreds of channels into single packages. Networks such as Comcast, Charter, and Time Warner will often tout “250 channels” in a single package, even though 230 of those channels will likely never be watched by subscribers.
Charter is in the middle of a takeover of Time Warner Cable, making it the second-largest cable provider in the United States. Addressing the Millennial issue might be an even bigger headache than addressing the loss of subscribers who have fled to Netflix, Hulu, HBO GO, and other programs.
Despite new preferences, Rutledge says consumers are only worried about price. “That doesn’t mean that the big products aren’t desirable,” Rutledge said. “It just means they’re expensive and that people’s lifestyles are putting them in a situation where they don’t have access to them. A lot of that is a function of the economic situation.”
The sad part? Rutledge doesn’t believe content providers will unbundle anytime soon. “My sense is that it is not about to fall apart and we’ll be having this conversation three years from now because I think there is nothing to incentivize anyone to pull it apart.”
Nielsen found that between 2008 and 2013 the average American household has received between 129.3 to 189.1 channels. Most people watched only 17 channels.