After two successive quarters of subscriber losses, the big pay TV providers might actually be making a comeback. It will be a few more weeks before research group SNL Kagan comes out with its final analysis of the multichannel video market. But at least for now, it appears that subscriber numbers for the fourth quarter are set to show a slight turnaround.
The following table gives a snapshot of pay TV subscriber numbers reported by public cable, satellite and IPTV providers over the last two quarters:
|Company||4Q Sub +/-||3Q Sub +/-|
|Time Warner Cable||-141,000||-155,000|
A few important caveats: These numbers only represent the major public pay TV providers that have announced so far, but there are still dozens of cable companies not represented in this chart — and those private providers could have a big impact on the final numbers. In the third quarter, for instance, private cable companies lost about 200,000 subscribers. While the top four cable providers reported about 518,000 subscriber losses in the third quarter, SNL Kagan reported that all cable providers — including those that don’t publicly report their earnings — lost a total of 741,000 subscribers in the third quarter.
And Charter Communications (s CHTR) reports its earnings next week, which could have some impact on what the final numbers look like. In the third quarter, Charter lost about 64,000 subscribers, and we expect similar losses in the fourth quarter. If its subscriber numbers swing dramatically in either direction, however, it could have substantial impact on subscriber numbers.
For now, though, public pay TV providers have reported about 130,000 more subscribers than at the same point in the third quarter — which is notable, since the third quarter’s final count was down by 119,000 subs. So the final fourth quarter numbers could be flat, or even up.
So what was different in the fourth quarter? While it’s difficult to pinpoint exact reasons for big changes in subscriber additions or subtractions, we could make some educated guess about why the numbers differed.
Comcast’s TV Everywhere Gambit May Finally Be Paying Off
The biggest difference between the third and fourth quarters comes from the number of subscribers Comcast (s CMCSA) lost — or in the case of the fourth quarter, the number it didn’t lose. While 135,000 subscribers lost is still not a favorable number, it’s less than half the number of subs lost during each of the previous two quarters. We’ve hypothesized that one reason Comcast subs weren’t as quick to leave during the fourth quarter is that they’re seeing more value from their cable subscription, which could be attributable to availability of cable content online and through the Comcast Xfinity iPad app.
Live Sports Lead the Day
The fourth quarter is packed with live sports events: The World Series, the introduction of the NBA and NHL seasons, and most of the NFL’s games are played during the period between October and December. A quick look at Cablevision’s sub numbers show how a blackout of Fox during the MLB playoffs and World Series can accelerate losses. And let’s face it: Americans love football, and if you’re a football fan, DirecTV (s DTV) is the place to be. While the NFL season technically starts in September, we wouldn’t be surprised if DirecTV’s robust subscriber growth in the fourth quarter was due in part to its exclusive access to the full slate of NFL games through its NFL Sunday Ticket service.
So what does this mean for Netflix? (s NFLX) Despite what looks like flat-to-up pay TV subscriber numbers, Netflix grew aggressively during the fourth quarter, adding 3 million subscribers and ending the year with more than 20 million users. And its viewers are watching more streaming video than ever. That suggests that for now, users are tuning in to online services like Netflix as supplemental to their existing cable subscriptions.
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