Pay-TV, Broadband Subs Moving in Opposite Directions

August 21, 2013

This article is included in these additional categories:


LRG-Pay-TV-Broadband-Subscription-Trends-in-Q2-Aug2013The pay-TV market is shrinking, while broadband subscriptions are picking up steam, according to a pair of reports from the Leichtman Research Group (LRG). LRG estimates that the top multichannel video providers, who represent around 94% of the market, shed a total of 344,318 subscribers during the second quarter, while the top broadband providers (many also doubling as pay-TV providers) added 294,304 subscriptions during the same period.

Although the second quarter is traditionally a soft one for pay-TV providers, their net loss of subscribers was higher this year than last (325,510). LRG’s figures are similar to those recently issued by IHS, which estimated that pay-TV providers lost 352,000 subscribers during the second quarter en route to the market’s first ever net loss of subscribers during the first half of a year.

While pay-TV subscriber losses accelerate, the opposite is true for broadband subscriptions. In the second quarter, LRG estimates that net broadband additions were 16% greater than in the same period last year.

The opposing trends are most pronounced for cable companies. Among the top cable companies, for example, Comcast lost 159,000 pay-TV subscribers, while gaining 187,000 broadband subscriptions. Time Warner similarly shed 189,000 pay-TV subscribers, while posting a net add of 21,000 broadband subscriptions.

Increasing broadband proliferation and decreasing pay-TV penetration may well be linked. According to recent research from Fiber to the Home Council Americas, only 1 in 3 under-35 broadband subscribers in the US and Canada get all their TV the traditional way. In fact, roughly 1 in 8 solely rely on over-the-top (OTT) services such as Netflix and Hulu to watch TV content, eschewing traditional TV entirely. Similar research from pivot suggests that a sizable group of young broadband subscribers who both stream and watch pay-TV intend to cut the cord and rely solely on OTT options.

A growing number of consumers also appear headed to fall into the “cord-never” bucket: a new study from The Diffusion Group (TDG) suggests that 18-24-year-olds living with their parents are far more likely to be inclined to sign up for an OTT service than a pay-TV service when they strike out on their own.

If that proves to be the case, the trends illustrated by LRG’s data are likely to continue.

Explore More Articles.

Marketing Charts Logo

Stay on the cutting edge of marketing.

Sign up for our free newsletter.

You have Successfully Subscribed!

Pin It on Pinterest

Share This