Pay TV subs in U.S. fall again in third quarter

Research firm SNL Kagan reports that U.S. cable operators lost 741,000 basic customers in the third quarter of 2010, the largest quarterly dip it's reported for the sector.
November 18, 2010

While a recently-released Nielsen study suggests that people who watch content on the Web are largely hanging onto their cable TV subscriptions, the latest report from research firm SNL Kagan points to a continued increase in cord-cutting.

Results from the SNL Kagan analysis of cable, DBS and telco video offerings, released yesterday, show that the U.S. multichannel segment dropped by 119,000 customers in the third quarter of this year. The firm estimates that U.S. cable operators lost 741,000 basic video customers in the quarter, marking the largest quarterly drop it’s ever reported for the sector.

Compare those numbers to third quarter 2009, when the American multichannel sector reported a 346,000 customer gain. Cable MSOs’ share of combined video subs then was at 62.9%, compared to 60.3% in Q3 2010. It’s the second consecutive quarter of video sub declines; the decline posted in Q2 of 216,000 customers for the segment was the first reported decline for the market in its history.

‘Operators are pointing to a continuation of the forces that pushed subscriber gains into negative territory in the second quarter, including the weak economy, high unemployment and elevated churn of former over-the-air households,’ said Ian Olgeirson, senior analyst at SNL Kagan. ‘However, it is becoming increasingly difficult to dismiss the impact of over-the-top substitution on video subscriber performance, particularly after seeing declines during the period of the year that tends to produce the largest subscriber gains due to seasonal shifts back to television viewing and subscription packages.’

The telco market share, on the other hand, added 476,000 customers in Q3 2010, giving it a 6.4% market share, up from 4.7% in Q3 2009. The DBS (direct broadcast satellite) sector also upped its market share less than 1% over the course of the year, to 33.2%.

About The Author
Daniele Alcinii is a news reporter at realscreen, the leading international publisher of non-fiction film and television industry news and content. He joins the rs team with journalism experience following a stint out west with Sun Media in Edmonton's Capital Region, and communications work in Melbourne, Australia and Toronto. You can follow him on Twitter at @danielealcinii.