Pay TV Providers Suffer First 4-Quarter Net Loss in Subscribers

June 3, 2013

This article is included in these additional categories:

Broadcast & Cable | Television

LeichtmanResearchGroup-Multi-Channel-Video-Provider-Subscription-Loss-June2013A recent study from Convergence Consulting Group detailed the rise in cord-cutting, showing that TV subscribers are being added at a far slower rate than lost. According to a more recent report from Leichtman Research Group (LRG), the top multi-channel video providers, who represent about 94% of the market, posted their first overall subscriber loss over a four-quarter period (between Q2 2012 and Q1 2013). Cable companies were the hardest hit, with a net loss of 1.6 million subscriptions, slightly higher than their net loss (~1.5 million) the previous year.

At the end of Q1 2013, these top cable companies accounted for roughly 51 million subscribers, meaning that their net loss represented almost 3% of their subscriber base.

Other multichannel video providers performed better. The top satellite TV companies posted a net gain of 57,000 subscriptions in Q1 and 160,000 overall in the 4-quarter period, although that’s a fraction of their overall base of more than 34 million subscriptions. The real winners were telephone companies Verizon FiOS and AT&T U-verse, posting a net gain of 1.3 million subscriptions over the 4-quarter period, or about a 16% net gain (to 9.6 million at the end of Q1 2013).

All told, the top multi-channel video providers posted a net gain of 194,265 subscribers in Q1 2013, but losses in Q2 and Q3 of 2012 more than offset that gain, leading to an overall net loss of about 80,000 subscribers over the 4-quarter period.

The researchers attribute the first-ever loss to 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,” but caution that “it is unlikely that these current modest industry losses are a harbinger of a more dramatic near-term market decline.”

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