U.S. pay TV subscriptions have declined for the first time in history last quarter, according to new data from SNL Kagan. The business intelligence company reports that cable companies lost 711,000 subscribers, which represents the biggest quarterly loss in cable TV’s history. Six out of eight cable TV operators also reported their worst subscriber losses ever last quarter.
Telcos and satellite TV providers were able to pick up some of those customers, posting combined gains of 495,000 subscribers. That still leaves 216,000 subscribers who cut the cord entirely. Pay TV operators gained some 378,000 subscribers during the same quarter last year.
SNL Kagan analyst Mariam Rondeli was careful not to read too much into those numbers when I talked to her on the phone today, saying that much of those losses seem to be attributable to customers who subscribed to pay TV early last year due to the broadcast digital transition. Now these customers see the prices for their introductory packages going up, and quite a few of them have decided not to stick around.
She also said that the continuing recession and its impact on the job and housing market seem to make people rethink their subscriptions. However, she doesn’t believe all is lost for cable and other forms of pay TV. “We do think the second quarter was unique,” she told me. SNL Kagan expects the industry to gain a total of 900,000 subscribers in the third and fourth quarter.
Rondeli also said that she doesn’t see over-the-top video as a driving factor behind the current losses, but she cautioned not to ignore online video. The overall pay TV market is saturated, with around 100 million households in the U.S. paying for TV services. That also means that over-the-top services have could impact future growth, even if the overall numbers of users accessing programing exclusively over the Internet are small. “It can make a difference even if you don’t have a huge pie,” she said.
Earlier today, the New York Times published a piece that proclaimed “no shortage of demand” for pay TV. Our own Ryan Lawler shot back, saying that “(t)he $100 cable bill is dead; the cable industry just doesn’t know it yet.”
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