Cord cutting seems to be having little impact on Internet Protocol Television (IPTV) providers even as subscribers are abandoning both satellite and cable companies. Data from IHS, a market research company, shows that AT&T’s Uverse (S T), Verizon’s FiOS (S VZ) and a few others added 398,000 net subscribers during the three months ending June 30, 2013. AT&T’s Uverse added 233,000 and Verizon added 140,000 subscribers to its FiOS video offering. A big reason for these new additions at telcos is their decision to spend more on marketing these services.
For the same April-to-June 2013 period, cable companies lost 588,000 subscribers and satellite companies lost 162,000 subscribers. During the same April-to-June time period in 2012, cable companies lost 598,000 subscribers while satellite companies lost 62,000 subscribers. IPTV providers added 304,000 subscribers.
At the end of June 2013, cable companies had 55 percent of the U.S. pay TV market, while satellite held 34 percent of the market with IPTV at 11 percent. These three groups are fighting over a shrinking base of new subscribers, many of whom are jettisoning pay TV in favor of cord cutting. IHS believes that total number of pay TV subscribers is going to decline from 100.89 million at end of 2012 to 100.77 million at end of 2013. A majority of the losses are going to come from satellite companies, according to UBS Equity Research. That can’t be good news for DirecTv and the Dish Network. No wonder Wall Street wants the two to merge.
These three charts from UBS Research do a good job of laying out the pay TV market.