SNL Kagan: Pay TV Subscribers Dwindle
August 23, 2010
MONTEREY, CALIF.: People
abandoned cable TV in record numbers during the second quarter of 2010, according
to analysts at SNL Kagan. Cable lost 711,000 subscribers, with six of eight
MSOs reporting their worst quarterly video losses as well.
The Internet--for once--isn’t believe to be driving the exodus. It’s the diminished
economy and the resulting unemployment and poor housing starts.
“Although it is tempting to point to over-the-top video as a potential culprit,
we believe economic factors such as low housing formation and a high
unemployment rate contributed to subscriber declines in the second quarter,”
Kagan’s Mariam Rondeli said. “We are also seeing churn resulting from the
broadcast digital transition, which boosted video uptake early last year, as
many have abandoned their paid subscriptions once initial promotional contracts
The overall U.S. multichannel market was dragged down by the cable loss,
delivering its worst performance on record during 2Q10. Pay TV providers
lost 216,000 customers in the quarter compared to a 378,000 gain in the same
period last year.
Kagan said full subscriber counts for cable, direct broadcast satellite and
telcoTV dropped to 100.1 million in the second quarter. DBS and telcoTV added
81,000 and 414,000 subscribers, respectively.
Cable operators’ share of combined video subscribers dropped to 61 percent
versus 63.6 percent in 2Q09. Telcos continue to take market share in the TV
provision business, growing from 4.3 percent in second-quarter 2009 to 6
percent in 2Q10. Although the DBS industry expanded market share over the past
year, the gains have been modest at less than 1 percent, Kagan said.
Nielsen Media Research data also shows cable penetration at 61.1 percent of TV
households, and 67.4 percent of pay TV households.
One place cable operators held their own during the quarter was in broadband
provision. The top 10 or so cable operators in the United States added 344,000
broadband subscribers in 2Q10, versus 246,000 a year ago, Leichtman Research
Group reported. Cable operators have a 55 percent market share in broadband, up
about 1 percent from a year ago.
The top eight phone companies lost a collective 7,500 broadband subscribers,
compared to a gain of 385,000 in 2Q09. The net result was that broadband
subscriptions grew at their slowest rate since Leightman started tracking the
industry nine years ago--by a total of 336,000 subscribers.
-- Deborah D. McAdams