New TV Season, And Fewer Viewers

Pay-TV subscriber losses, and younger viewers watching online, spell trouble

As a college student, Jordan Geddis took cable TV for granted. MTV, Comedy Central, and ESPN were just part of the dorm tab at Syracuse University. Even when she moved off campus, Geddis split the bill with roommates. Now, on her own in a tough economy, the 25-year-old General Dynamics (GD) engineer in Groton, Conn., no longer pays. “When I had cable I followed a couple shows, but the rest was garbage to me,” Geddis says. “Online I can watch the few programs I actually care about.”

With more young adults tuning out this TV season, the industry is confronting a generation of viewers who say they won’t pay the typical $75 monthly cable or satellite bill. Nielsen (NLSN), whose TV ratings influence ad rates, in May cut the estimated number of U.S. TV households by 1 percent, to 114.7 million, the first drop since 1990. College towns such as Boston, Madison, Wisc., and Austin, Tex., posted some of the biggest declines, suggesting some fans of Family Guy are watching on Hulu Plus or Netflix (NFLX) for $7.99 a month, a fraction of a cable bill.

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