U.S. cable subscriptions fall in Q2 2010

Research firm SNL Kagan reports that the U.S. multichannel market has posted its worst performance on record.
August 25, 2010

The U.S. paid television industry experienced its worst quarter in history in the second quarter of 2010, losing 216,000 customers compared with a 378,000 gain in the same period last year, according to Monteray, CA-based research firm SNL Kagan.

The loss amounts to 0.2% of the overall number of subscribers to cable, satellite and telco video in the country, which now stands at 100.1 million. Cable took the biggest hit, losing 711,000 subscribers, with six of the eight top cable operators reporting their worst-ever quarterly losses. Satellite and Internet-based service subscriptions gained 81,000 and 414,000 subscriptions, respectively.

The research firm, which has been tracking subscription data since the 1980s, blamed the drop on the recession and the increasing number of channels through which consumers are able to watch television programming. It’s the first decline posted by SNL Kagan since it began tracking the data.

‘Although 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,’ SNL Kagan analyst Mariam Rondeli said in a statement. ‘We 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.’

The cable companies’ share of combined video subscribers is down to 61% compared with 63.6% in the same period last year. Telecom companies continued to grow market share in online video business, up from 4.3% in the second quarter last year to 6.0% in the second quarter of 2010. The digital satellite industry’s market share also went up but the gain was less than 1%.

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