More troubling news for the US pay-TV industry: the number of pay-TV subscribers in the US shrunk by 146,000 during the first 6 months of this year (H1), the first net loss of customers over the initial 6 months of a year, according to new figures released by IHS. The report follows a recent one from Leichtman Research Group (LRG) which found the top multi-channel video providers posting their first overall subscriber loss over a rolling four-quarter period (between Q2 2012 and Q1 2013).
IHS predicts that this year will mark the first year ever that pay-TV subscriptions will decline. Net loss of subscriptions is predicted to be around 120,000, falling to 100.77 million from 100.89 million last year.
LRG attributes the subscription decline in part to consumers who have never had pay-TV service and don’t intend to obtain it (somewhere in the range of 1 in 8 under-35 broadband subscribers) as well as consistent complaints over the cost of pay-TV.
Nevertheless, not all providers are being affected by the market’s downturn. US internet protocol TV (IPTV) providers (such as AT&T Uverse and Verizon FiOS) posted a net growth of 398,000 subscribers during Q2 (up from 304,000 in Q2 2012), even as cable TV lost 598,000 customers (similar to last year’s 588,000) and satellite TV lost 162,000 (up from last year’s 62,000). Overall, the number of cable TV subscribers dropped by 352,000 during the second quarter.
By the end of the second quarter, cable providers accounted for 55% of the market, while satellite captured 34% and IPTV 11%, per IHS.