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05.27.2013
Originally featured on BroadcastEngineering.com
Cord cutters are hurting pay television
The top nine cable companies lost about 264,000 video subscribers in the first quarter of 2013 alone.

The U.S. pay television industry has suffered a net loss of about 80,000 subscribers over the past year — its first-ever annual net subscriber loss. This was compared to a net gain of about 380,000 over the prior year.

The top nine cable companies lost about 264,000 video subscribers in first quarter 2013, and about a 1,560,000 over the past year — compared to a loss of about 1,535,000 subscribers over the prior year

A new study by Leichtman Research Group found that the 13 largest multichannel video providers in the U.S. — representing about 94 percent of the market — added about 195,000 net additional video subscribers in the first quarter of 2013. That was down compared to a net gain of about 445,000 in the first quarter a year ago and a net gain of about 470,000 in the first quarter of 2011.

These first quarter gains, however, were not enough to offset subscriber losses from the second and third quarters in 2012, leaving major multichannel video providers with a net loss.

“First-time ever annual industry-wide losses reflect a combination of a saturated market; an increased focus from providers on acquiring higher-value subscribers; and some consumers opting for a lower-cost mixture of over-the-air TV, Netflix and other over-the-top viewing options,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group.

GigaOM reported Leichtman’s statement was quite a turnaround. The research firm’s head executive has been an outspoken skeptic of the cord-cutting phenomenon. In a 2010 New York Times story, Leichtman called cord cutters “really just a bizarre breed of people, usually in New York or San Francisco, who don’t watch a lot of television in the first place.”

The new figures confirm a definite trend of cord cutters having an impact on pay television as viewers move to watching more inexpensive television over the Internet.



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