Economy Pulls Down Pay-TV Subscribers For First Time Ever In Q2
Economic factors such as high unemployment and a weak housing market led to a net loss of some 216,000 pay-TV subscribers in the second quarter, according to SNL Kagan. The aggregate pay-TV subscriber drop compares to a gain of 378,000 subscribers in the second quarter of 2009.
If there is a silver lining for pay-TV providers, at least the losses donâ€™t represent cord-cutting for Internet video sources.
â€śAlthough it is tempting to point to over-the-top video as a potential culprit, we believe economic factors such as low housing formation and a high unemployment rate contributed to subscriber declines in the second quarter,â€ť says SNL Kagan Analyst Mariam Rondeli. â€śWe are also seeing churn resulting from the broadcast digital transition, which boosted video uptake early last year, as many have abandoned their paid subscriptions once initial promotional contracts expired.â€ť
Cable operators are responsible for the industryâ€™s net subscriber loss. Some 711,000 cable subscribers ended their service during Q2, and six of the countryâ€™s top eight operators reported their steepest quarterly video losses, Kagan says. Providers of satellite and telco video services, meanwhile, managed to add 81,000 and 414,000 subscribers, respectively, during the quarter.
Accordingly, cableâ€™s share of combined video subscribers dropped to 61%, versus 63.6% in the second quarter of 2009. Telcos continue to take market share in the video business, growing from 4.3% in second-quarter 2009 to 6.0% in second-quarter 2010. Although the satellite industry expanded market share over the past year, the gains have been modest at less than 1%.
Full subscriber counts for cable, satellite and telco video services stand at 100.1 million.