Latest Research Highlights Drop in Video Subscriptions for Cable, Rise for IPTV

Representing some 94% of the market, the 13 largest providers of multi-channel video in the U.S. lost about 325,000 net additional video subscribers in 2Q 2012, according to the latest data from Leichtman Research Group (LRG). Though large by historical standards, 2Q's net decline was only about 1,500 more than the last decline of similar magnitude, which occurred in in 2Q 2011, according to LRG.

The total subscriber base for the largest 13 U.S. providers of multi-channel video totals nearly 94.7 million, with the top nine cable service providers accounting for around 52.1 million of the total. Satellite TV service providers' subscriber base totals nearly 34 million, while the top telcos' multi-channel video subscriber bases totals some 8.6 million, according to LRG's research.

"While reports of multi-channel video industry losses in the second quarter of 2012 have rekindled pronouncements of cord-cutting impacting the industry, the reality is that industry-wide losses in the traditionally weak quarter were nearly identical to losses in last year's second quarter," commented Bruce Leichtman, LRG president and principal analyst. "Over the past year, multi-channel video providers added about 375,000 subscribers, compared to a gain of about 210,000 over the prior year."

Another market research firm, IHS Screen Digest, reported net subscriber additions for U.S. pay-TV operators dropped nearly 350,000 quarter-over-quarter (QoQ) in 2Q, the largest decline ever recorded. Weakening economic conditions and intensifying competition from OTT video services such as Netflix took their toll on pay-TV subscriber adds, according IHS Screen Digest.

Both market research firms found 2Q net subscriber declines for the largest U.S. cable and satellite TV providers. The top U.S. telcos, in contrast, added subscribers on a net basis in 2Q. LRG's data shows net declines of 601,403 and 109,000 for cable and satellite TV providers, and a 386,000 net subscriber add for Verizon FiOS and AT&T U-verse in 2Q 2012.

Other key findings in LRG's latest report include:

  • The top nine cable companies lost about 540,000 video subscribers in Q2 2012 -- compared to a loss of about 600,000 subscribers in Q2 2011
  • The top telephone providers added 275,000 video subscribers in Q2 2012 -- compared to 386,000 net additions in Q2 2011
  • Telco video net adds in Q2 2012 were the fewest since Q3 2007
  • Satellite TV providers lost 62,000 subscribers in Q2 2012 -- compared to a loss of 109,000 in Q2 2011
  • DirecTV lost 52,000 subscribers in Q2 2012 -- this was DirecTV's first quarterly subscriber loss ever

Written by Kevin Kutcher at 10:00
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