Cable Giants Embrace Innovation to Battle Cord Cutting

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The threat of cord cutting is finally a reality, says industry analyst Craig Moffett. He says the first quarter saw the largest-ever decline in cable subscribers, and projects that the percentage of Americans who pay for TV will drop from 88 percent this year to 82 percent in 2020.

Moffett says cable distributors "have very little ability to push back on the escalation in their costs. But they're hearing from their end users that prices are increasing too fast; they're between a rock and a hard place."

Addressing those concerns, at the National Cable Show in Washington DC, the cable distributors are showcasing all sorts of new technologies to give their subscribers greater value for that monthly cable bill, and keep them hooked.

Cox Communications president Pat Esser acknowledged the problem: "Cord-cutting is real.... Consumer behavior is shifting and they want their entertainment where they want it and when they want it and on the devices they want it on."

To address the threat, Esser says the company researched what improves customer interaction, finding that consumers prioritized a simpler user interface, a more powerful DVR, personalized recommendations, and access via other devices. It's rolling out more of these services this summer.

Comcast CEO Brian Roberts unveiled a new user interfacecalled X2, saying its voice controlled remotes and "intelligent" user interaction will be game changers for the industry.

"It all starts with our goal which is to take all of the intelligence out of the cable box and put it in the cloud. That allows us to innovate faster," Roberts said. "It's smarter, it's personalized, it's easy, it's fun and it's beautiful."

Twitter's COO Ali Rowghani spoke at the cable show to convince cable companies that Twitter can be a valuable tool to engage consumers with live TV and prevent cord-cutting.

It all comes down to the correlation between tune-in behavior and Twitter activity, which Nielsen recently reported. After speaking on stage Rowghani met with a number of cable chiefs to drive more partnerships—like the one Twitter has with ESPN—in the future.

"We believe TV has always been social except now with the advent of social media, that social conversation can happen at a much bigger scale and can be measured and acted upon," Rowghani said. "That's what's really interesting and profound we think about Twitter."

—By CNBC's Julia Boorstin. Follow her on Twitter: @JBoorstin