Light Reading
Two new research reports indicate that the US pay-TV industry finally hit the wall last year, as cable sub losses overwhelmed customer gains by telco and satellite TV providers.

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
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   >   >>
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Interviews
CenturyLink: Building the Case for NFV

12|19|14   |   02:14   |   (0) comments


At the 2020 Vision Executive Summit, James Feger, VP, Network Strategy & Development at CenturyLink, talks about how the US operator is approaching virtual network functions from an operational and business case perspective.
LRTV Interviews
Liberty Global Sees Business Goldmine

12|18|14   |     |   (0) comments


Steen Sorensen, VP of business services for Liberty Global, explains where the giant international MSO sees growth potential.
LRTV Documentaries
EE: The Road to 5G

12|16|14   |   16:02   |   (1) comment


Andy Sutton, the principal network architect at UK mobile operator EE, explains how his company is using Wembley stadium as a wireless test bed and how that's helping EE to plan the evolution to 5G.
LRTV Huawei Video Resource Center
Highlights of Huawei's NFV Open Cloud Forum 2014

12|16|14   |     |   (0) comments


Huawei hosted its inaugural NFV Open Cloud Forum during the SDN & OpenFlow World Congress 2014 in Düsseldorf, Germany. The Forum brought together technology thought leaders, senior executives and telecom professionals from global carriers, industry associations, as well as other partner companies in the ecosystem, to exchange views on and collectively explore how ...
LRTV Custom TV
Realizing Operators' Digital Vision

12|16|14   |   5:23   |   (0) comments


Leveraging technology is fundamental to digital transformation but understanding customers and serving them really well is at the heart of digital businesses. TM Forum lists the following as the strategic pillars of the digital business: business agility and rapid innovation, operational agility and effectiveness, IT and data centricity, plus customer centricity. ...
LRTV Documentaries
US Cellular Injects Analytics Into LTE

12|16|14   |   2:57   |   (1) comment


US Cellular's Mario Vela explains how the operator uses analytics for network planning and what comes next as the carrier looks to eke more value out of its metrics.
LRTV Interviews
How Cox Biz Plans to Keep Growing

12|15|14   |     |   (2) comments


Steve Rowley, SVP of Cox Business, details how the third-biggest US MSO intends to boost its revenues to $2 billion and beyond over the rest of the decade
LRTV Huawei Video Resource Center
Interview With Bill Zhang, Director of SoftCOM Product Management, Huawei

12|15|14   |   2:50   |   (0) comments


Bill Zhang elaborated on Huawei's open philosophy in NFV solution development and network architecture design at the SDN & OpenFlow World Congress 2014.
LRTV Huawei Video Resource Center
Event Highlights: Huawei at SDN & OpenFlow World Congress 2014

12|15|14   |   3:43   |   (0) comments


Huawei joined the 2014 SDN & OpenFlow Congress as one of the key sponsors and contributors. At the event, Huawei reinforced the openness and flexibility of its network infrastructure strategies, and provided updates on its SDN and NVF innovations. Through participations at the exhibitions, forums and speeches, Huawei encouraged the industry to "think bigger and ...
LRTV Interviews
How Cable Biz Services Hit $10B Mark

12|12|14   |     |   (1) comment


Cable operators reached $10 billion in annual business services revenues by delving deeper into their vertical markets and expanding beyond the smallest firms.
LRTV Documentaries
Mediacom Aims to Test Connected Tractors

12|11|14   |   05:07   |   (3) comments


Cable business service provider is taking its services to the 'agribusiness' sector in partnership with farm equipment specialist John Deere and is getting involved in Gigabit Cities developments.
LRTV Interviews
TWC Business Looks Beyond $3B

12|10|14   |     |   (0) comments


TWC Business Services chief Phil Meeks explains how his unit has reached $3 billion in annual revenues and what its plans are for next year.
Upcoming Live Events
February 10, 2015, The Westin Peachtree Plaza, Atlanta, GA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Hot Topics
T-Mobile, BlackBerry Flirt With Reuniting
Sarah Reedy, Senior Editor, 12/17/2014
1-Gig: Coming to a Small Town Near You
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 12/17/2014
Comcast Launches 4K Streaming Service
Alan Breznick, Cable/Video Practice Leader, 12/18/2014
US Carriers, You're Going to Cuba!
Mitch Wagner, West Coast Bureau Chief, Light Reading, 12/18/2014
T-Mobile Lights Up 27 Wideband LTE Cities
Sarah Reedy, Senior Editor, 12/15/2014
Like Us on Facebook
Twitter Feed
Webinar Archive