A new study finds that the multichannel universe fell by 119,000 customers in the third quarter, heightening concerns about vulnerability to over-the-top substitution.
SNL KAGAN ANALYSIS
More Cable, Satellite Subs Cutting Cord
According to SNL Kagan’s analysis of cable, DBS and telco video offerings, the U.S. multichannel segment fell by 119,000 customers in the third quarter of 2010, compared to a 346,000 gain reported in third-quarter 2009.
SNL Kagan estimates U.S. cable operators lost 741,000 basic video customers in third-quarter 2010, marking the single largest quarterly dip for cable since SNL Kagan began compiling data for the segment in 1980. Cable MSO’s share of combined video subscribers continues to slide, dropping to 60.3%, versus 62.9% in third-quarter 2009.
Despite the overall weakening in multichannel subscription trends, the study found, the telco TV industry remains on a growth trajectory, adding 476,000 customers in the third quarter. Although still a modest 6.4%, telco market share is steadily rising, up from 4.7% in third-quarter 2009. The DBS industry, which added 145,000 subscribers in the third quarter, is expanding its market share slightly, up less than 1% over the past year to 33.2%.
The third-quarter multichannel market drop-off marks the second consecutive quarter of video subscriber declines, according to SNL Kagan. The multichannel market declined for the first time in history when it lost 216,000 customers in the second quarter of 2010. In the past two quarters combined, the segment has fallen 2.3% to just more than 100 million subscriptions, not eliminating overlap of duplicate subscriptions.
“Operators are pointing to a continuation of the forces that pushed subscriber gains into negative territory in the second quarter, including the weak economy, high unemployment and elevated churn of former over-the-air households,” said Ian Olgeirson, senior analyst at SNL Kagan. “However, it is becoming increasingly difficult to dismiss the impact of over-the-top substitution on video subscriber performance, particularly after seeing declines during the period of the year that tends to produce the largest subscriber gains due to seasonal shifts back to television viewing and subscription packages.”
Comments (4)
Kevin Hurley says:
November 17, 2010 at 4:01 pm
The headline states that more cable AND satellite subs are “cutting cord” yet the body of the article states “The DBS industry, which added 145,000 subscribers in the third quarter, is expanding its market share slightly, up less than 1% over the past year to 33.2%.” So the headline leaves a false impression as to satellite subs.
ali amirhooshmand says:
November 17, 2010 at 4:26 pm
You don’t suppose that crappy cable programming could be part of the cause, do you?
douglas skene says:
November 17, 2010 at 7:45 pm
It is what we have seen OTA is making a comeback it has take a while for people to see what they need to do to cut the cord and still meet their needs but…. people at going back to OTA for “normal TV” and filling in for movies and other single shows with internet. Add to that cables is not the best quality when a average cable bill is not $138 a month that is …. $1600 a year that is not chicken feed
Vasilescu Nicolai says:
November 17, 2010 at 9:27 pm
I guess the millions of dollars that Comcast spends on advertising has really paid off.
Comcast doesn’t care about losing customers. If they did, they would care about customer service, which they do not.
Comcast focuses on extracting as much money from existing customers through upsells, and selling business accounts.
Look at cash flow… that’s what Comcast does.
Why do you think they bought NBC? Even Comcast knows that the days of the middleman are numbered.