Light Reading

Look Out Below: Pay-TV Posts First Yearly Sub Drop

Alan Breznick
3/19/2014
50%
50%

For the first time in its history, pay-TV is looking like a losing proposition, as the US pay-TV industry lost more subscribers than it gained last year.

Two new research reports indicate that American pay-TV providers collectively lost as many as a quarter of a million video customers in 2013 as cable operators continued to shed millions of video subscribers. Although both telco and satellite TV providers continued to score gains last year, for the first time those gains were not enough to wipe out the big cable losses. (See Pay-TV Makes Small Gain in 2012.)

In a report released Wednesday, SNL Kagan found that pay-TV providers lost 251,000 video subscribers, despite posting a modest gain of 40,000 subs in the fourth quarter. The annual decline, which dropped the industry's total customer count to about 100 million subscribers, also came despite a modest rise in household formation, as the number of occupied units reached nearly 115 million by year-end. (See Pay-TV Adds Trailed Housing Growth in 2012.)

As usual, cable operators led the way down. Kagan estimates that US MSOs lost nearly 2 million video subscribers last year, including 388,000 in the fourth quarter alone, as customers either switched to telco or satellite TV providers or cut the video cord entirely. As a result, the cable industry ended the year with 54.4 million video subs, reducing its market share to 54%.

In contrast, the telcos gained about 1.5 million video customers last year, led by strong gains by both AT&T Inc. (NYSE: T)'s U-verse and Verizon Communications Inc. (NYSE: VZ)'s FiOS services. With these gains, the phone players boosted their collective total to about 11 million video customers, earning them an 11% market share.

The nation's two major satellite TV providers struggled much more for growth than the telcos, especially perennial also-ran Dish Network LLC (Nasdaq: DISH), as they focused more on retaining their highest-paying customers. But they still produced an overall gain of 170,000 video subscribers in 2013, thanks to sub increases for DirecTV Group Inc. (NYSE: DTV) and reduced customer churn rates for both operators. As a result, they ended the year with 34.3 million subscribers, giving them a 34% share.

The Kagan results are consistent with the numbers posted by Leichtman Research Group Inc. (LRG) last Friday. In its latest report on the US pay-TV sector, LRG found that the largest 13 pay-TV providers in the nation lost 105,000 video subscribers last year, reversing their gain of 175,000 subs in 2012.

Similar to what Kagan just reported, LRG found that heavy cable losses more than offset satellite and telco TV gains. The report said the top nine US MSOs shed more than 1.7 million video customers in 2013, a worse performance than the 1.4 million customers they lost in 2012. As a result, the nine MSOs ended the year with a total of 49.6 million subscribers, putting them below the 50-million mark for the first time in years.

In contrast, LRG reported that the top two telco TV providers, AT&T and Verizon, collectively added nearly 1.5 video customers in 2013, up from 1.3 million in 2012. The top two satellite TV providers, DirecTV and Dish, added 170,000 video subs, down from 288,000 the year before.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(24)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 3   >   >>
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/20/2014 | 7:04:18 PM
Re: How bad is it
Hypothetically, we prefer to watch TV on the big TV in the living room.

Not that we would ever borrow someone's password anyway. Or download pirated content. Because that would be WRONG.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
3/20/2014 | 2:20:36 PM
Re: Comcast
You are free to think as you like, right or (in this case) wrong.
Jessie Morrow
50%
50%
Jessie Morrow,
User Rank: Lightning
3/20/2014 | 2:10:02 PM
Re: Comcast
@mendyk, I would not continue this argy-bargy if it were not very obvious that you take the opposite view of the Consumer Reports email, as you so well "advocated" here,

 Last I checked, though, access to the Internet and pay TV service is not an inalienable right. It's also not a mandatory obligation to purchase these services. And all of these services are provided by for-profit companies.

Is your gripe with corporate advocacy vs personal advocacy? If I had plagarized CR's email, deleted all mention of CR  and put my name on it rather than Jim Guest's would that have made it more acceptable?
SarahReedy
50%
50%
SarahReedy,
User Rank: Blogger
3/20/2014 | 1:37:54 PM
Re: How bad is it
I am not sure, although most streaming services have the same loophole. I imagine they'll get tighter with authentication in the future.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
3/20/2014 | 1:28:31 PM
Re: Comcast
Understood, and the editor of this publication knows my position on this. There is no issue with thoughtful exchanges and differences of opinion regarding the effects of telecom industry developments on the consumer market -- there wouldn't be a telecom industry without consumers. I just don't see a point to advocacy posting here. Reprinting emails from Consumer Reports crosses a line for me.
Jessie Morrow
50%
50%
Jessie Morrow,
User Rank: Lightning
3/20/2014 | 1:21:21 PM
Re: Comcast
@mendyk, among the  posts on this subject DOShea brought up the topic of the Comcast/TWC deal, no one seemed to object at the time, the topic was now open & on the table, and I threw my 2 cents in. Granted if this were a presentation before the Supreme Court you might have a point. But this is not the first time consumer issues have appeared here nor will it be the last.
Jessie Morrow
50%
50%
Jessie Morrow,
User Rank: Lightning
3/20/2014 | 1:08:32 PM
Re: How bad is it
Sarah, don't feel badly you are not the only one with thoughts of Content Theft dancing in your head, just recently a relative admitted doing the same. And it's so very obvious so why has HBO left this unfilled loophole?
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
3/20/2014 | 1:06:06 PM
Re: Comcast
It is a consumer issue. But this isn't a consumer-oriented message board. Of course Consumer Reports has an issue with rising cable and Internet access fees, and since we all are consumers of one sort or another, we all have these issues. Last I checked, though, access to the Internet and pay TV service is not an inalienable right. It's also not a mandatory obligation to purchase these services. And all of these services are provided by for-profit companies.
SarahReedy
50%
50%
SarahReedy,
User Rank: Blogger
3/20/2014 | 12:43:27 PM
Re: How bad is it
Not that I would ever do this...but, "borrow" a friend's HBO Go password, and you're all set to watch it on your iPad!
Jessie Morrow
50%
50%
Jessie Morrow,
User Rank: Lightning
3/20/2014 | 12:30:23 PM
Re: Comcast
Apparently Consumer Reports considers this to be a consumer issue as do I. I'd be interested in hearing from you why you think otherwise.
Page 1 / 3   >   >>
From The Founder
Light Reading sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Custom TV
Hosting in Ireland, Past & Present

2|10|16   |   16:07   |   (0) comments


Garry Connolly, president of Host in Ireland, presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
Women in Comms Introduction Videos
What's Hot in Mobile Commerce?

2|10|16   |   12:18   |   (1) comment


Claire Maslen, financial services relationship manager at the GSMA, talks about the development of the digital commerce sector and the types of relationships that mobile operators are developing to further their m-commerce strategies.
LRTV Documentaries
EANTC Tests Nokia IP Routing & Mobile Gateway VNFs for Real World Deployment

2|9|16   |   5:08   |   (1) comment


Nokia obtained validation of its virtualized router and virtualized mobile gateway capabilities through rigorous testing performed by EANTC. The results set a new industry benchmark for outstanding performance, scalability, resiliency and manageability. Nokia VNFs are ready for telco cloud deployment, so that service providers can accelerate mobile, business and ...
Between the CEOs
CEO Chat With Level 3's Jack Waters

2|8|16   |   26:15   |   (1) comment


Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
LRTV Custom TV
The Composable Telco

2|8|16   |   24:46   |   (0) comments


Heavy Reading's Principal Analyst Caroline Chappell presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Shades of Ray
MWC: Buckle Up for 5G & the IIoT

2|2|16   |   02:28   |   (0) comments


This year's Mobile World Congress looks set to be a 5G land grab and a chance to get down and dirty with the Industrial Internet of Things (IIoT) – but what will the 5G discussions actually be about?
LRTV Custom TV
Case Study: Building China's Next-Gen TV Networks

2|2|16   |   5:01   |   (0) comments


With over 2 billion viewers worldwide, Shenzhen Media Group is one of China's largest content producers. By partnering with Huawei and Sobey, SZMG was able to modernize media operations with the Converged News Center, a production studio that is a model for next-generation workflows.
LRTV Custom TV
Quad Channel Modulator Driver with 46 Gbaud Capability from MACOM

1|28|16   |     |   (0) comments


MACOM's MAOM-003427 is the industry's first surface-mount modulator driver with 46 Gbaud capability to support next generation 200G and 400G applications.
Upcoming Live Events
March 10, 2016, The Cable Center, Denver, CO
April 5, 2016, The Ritz Carlton, Charlotte, NC
May 23, 2016, Austin, TX
May 24-25, 2016, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Google's 5G Radio Ambitions Are Expanding
Dan Jones, Mobile Editor, 2/5/2016
Cincinnati Bell Joins Weight Watchers Club
Alan Breznick, Cable/Video Practice Leader, 2/5/2016
Yahoo & Verizon Sitting in a Tree...
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 2/8/2016
Vodafone: Flexible Work Policies Boost Profits
Sarah Thomas, Editorial Operations Director, 2/8/2016
It's Time to Integrate OTT Video
Alan Breznick, Cable/Video Practice Leader, 2/8/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Animals with Phones
Retro Is the Way to Be Click Here
Some animals are too cute for smartphones.
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.