Americans Can't Live Without Their Cable TV
"We live in a time when cellphones and cable TV are considered necessities," he said. "But they really aren't," Jeff Wise, president of Consumer Credit Counseling Service of Southern West Virginia, told NBC affiliate WBOY.
The Denver Post similarly advised readers that if they want to avoid bankruptcy, they need to "eliminate ... luxuries that we pretend are necessities" such as "visits to the spa ... and cable television."
But it's not clear Americans can or will do it. Television is as much of a staple in the American diet as oil and apple pie.
"What we have historically seen is that cable operators fare pretty well during recession periods like in 2000 and 2001," says Thomas Egan, an analyst with Collins Stewart. "The current economic malaise could be deeper or last longer, but customers tend to cut spending on other entertainment areas, like going out to dinner or the theater, rather than cut cable."
We'll find out soon enough whether cable television services make the cut for millions of consumers. Cable operators are scheduled to post third-quarter results over the next week or so -- Comcast reports third-quarter earnings on Wednesday, while Cablevision reports on Nov. 6 and Time Warner Cable releases earnings on Nov. 5.
And despite the gut-wrenching financial crisis; the billions of dollars Americans lost in retirement savings over the last month; and dismal consumer confidence, Wall Street analysts don't expect Comcast and competitive cable operators to lose much business as a result of the economic downturn.
"Video and broadband are no more discretionary for most families than running water or electricity," said Berstein Research analyst Craig Moffett, in a note to investors.
One indicator that Americans aren't cutting cable service just yet: High-definition, flat-panel displays are still selling quite well, and are supposed to sell well through the holiday season.
"To the degree that we see fewer flat screens sold, we may see a slowdown in growth of high-definition television services," says Egan.
But when there are seemingly infinite alternatives of free, web-based video sites (including Hulu, Fancast and Veoh) what will keep Americans paying? It may be habit.
"We don't expect cuts in the total number of cable subscribers," says Egan. "[Americans] may reduce how much they're spending on cable, but they won't eliminate their spending altogether."