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By the numbers: good news/bad news with Q1 video subs

Wed, 05/21/2014 - 1:22pm
Brian Santo

The pay-TV universe expanded by about 260,000 subscribers in the first quarter, compared to a gain of about 230,000 video subscribers in Q1 2013.

The top multi-channel video providers account for nearly 95.8 million subscribers – with the top nine cable companies having 50.4 million video subscribers, satellite TV companies having 34.4 million subscribers, and top telephone companies having about 11 million subscribers.

In keeping with ongoing trends, cable operators in aggregate lost subscribers, but it was the smallest loss in five years, according to Leichtman Research Group. The top nine cable companies lost about 50,000 video subscribers in 1Q 2014 –the fewest quarterly losses since the first quarter of 2009.

IHS Technology noted that Comcast and Time Warner Cable both played major roles in the cable sector’s performance during the quarter. The company noted that Comcast added 24,000 video subscribers in the first quarter, the second straight quarter of positive video subscriber growth for the company – “a rare feat for any cable operator in today's highly competitive pay TV landscape.” Comcast credits its Xfinity entertainment operating system and promotions for the strong upswing.

Time Warner Cable, meanwhile, had its strongest in several years, in that it limited its video subscriber losses to just 34,000, a huge improvement over the 118,000 lost during the first quarter of 2013.

IHS said it predicts that “the number of pay TV households will remain flat overall and that cable’s positive momentum of the past three quarters will likely continue, meaning that gains for U-verse and Verizon’s FiOS will have to come from somewhere.”

IHS also expects that both DBS providers are likely to find it harder and harder to attract new subscribers (the prediction was made before AT&T announced its intention to buy DirecTV.)

BROADBAND

On the broadband side, that the seventeen largest cable and telephone providers in the U.S. (representing about 93 percent of the market) acquired nearly 1.2 million net additional high-speed Internet subscribers in the first quarter of 2014, according to the statistics compiled by LRG, more than the industry attracted in the first quarter a year ago.

These top broadband providers now account for over 85.5 million subscribers, with top cable companies having 50.3 million broadband subscribers, and top telephone companies having over 35.2 million subscribers.

Also in keeping with recent trends, cable picked up the majority of the net adds: 83 percent of them.

AT&T and Verizon continue to essentially convert DSL subscribers to U-verse and FiOS, respectively, though they both grew overall broadband subscribership. Between, they added 732,000 U-verse and FiOS broadband subscribers against a net loss of 638,000 DSL customers. 

 “With nearly 1.2 million net additions in the first quarter of 2014, broadband providers had their best quarter in two years,” said Bruce Leichtman, president and principal analyst for LRG. “If recent history is an indicator, however, gains will be slower over the next couple of quarters.  In each of the past four years, net adds in the first quarter were greater than in the second and third quarters combined.”

HIS, meanwhile, noted that broadband is compensating for the slower growth experienced on the video side of the business. “But video still commands the most revenue and will continue to do so for the foreseeable future. In 2013, broadband generated around half of the revenue that video did. With the addition of broadband and voice, former cable TV operators who have become cable Internet service providers (ISPs) are more profitable than ever.”

 

Multi-Channel Video Provider

Subscribers at the end of 1Q 2014

Net Adds in 1Q 2014

Net Adds in 1Q 2013

Cable Companies

 

 

 

Comcast^

22,601,000

24,000

(25,000)

Time Warner

11,359,000

(34,000)

(118,000)

Charter

4,355,000

13,000

(35,000)

Cablevision

2,799,000

(14,000)

(5,000)

Suddenlink

1,187,500

2,400

800

Mediacom

937,000

(8,000)

(1,000)

Cable ONE

524,563

(14,331)

(5,435)

Other major private companies*

6,655,000

(20,000)

(40,000)

Total Top Cable

50,418,063

(50,931)

(228,635)

Satellite TV Companies (DBS)

  

 

DirecTV

20,265,000

12,000

21,000

DISH

14,097,000

40,000

36,000

Total Top DBS

34,362,000

52,000

57,000

Telephone Companies

 

 

 

AT&T U-verse

5,661,000

201,000

232,000

Verizon FiOS

5,319,000

57,000

169,000

Total Top Phone

10,980,000

258,000

401,000

Total Multi-Channel Video

95,760,063

259,069

229,365

Sources:  The Companies and Leichtman Research Group, Inc.

*  Includes LRG estimates for Cox, and Bright House Networks

^ Comcast revised its methodology for counting subscribers to a Billable Customer method in 1Q 2014

Top cable companies do not include overbuilder WOW with 694,300 subscribers

Net additions reflect pro forma results from system sales and acquisitions

Top multi-channel video providers represent approximately 94% of all subscribers

Company subscriber counts may not solely represent residential households

Note that LRG consumer research finds that about 1% of households subscribe to both cable and DBS

 

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