Best of times, worst of times as pay-TV fends off OTT, cord-cutting in Q4 2014
DetailsEditor | 26 February 2015
In its latest quarterly analysis of the pay-TV market, known colloquially as the cord-cutting report, US financial analyst Moffett Nathanson has noted the complexity of the battle royal between operators and the forces of over-the-top (OTT).
The analyst noted that in the fourth quarter of 2014, and despite the best efforts of the likes of Netflix, Amazon and Hulu — soon to be joined by ESPN's Sling OTT service — total US pay-TV subscriptions had actually risen by 104,000 in the quarter. The firm calculated that at 2.2%, year-on-year cable losses were at their lowest level for years, however this was balanced by sluggish (0.15%) growth for satellite subs, the lowest ever figure in the time that the firm has been making such calculation, and it also found that telco TV/IPTV was up 9.9%. Though impressive, in real terms the growth had dipped below double digits for the first time in a number of years and compared with 15.8% in the previous year.
Yet despite this rise in absolute numbers, the analyst also pointed to the fact that in the quarter the growth in the number of occupied homes in the country had risen faster than at any point since the recession, thus actually suggesting that cord-cutting was accelerating. Taking into account a number of weighting factors, it calculated that 1.4 million homes had cut the cord over 2014, the highest ever 12-month total, leading to a total of 3.8 million homes since 2010.
Concluding, Moffett Nathanson warned that Sling's arrival, plus that of a similar offering likely from Sony, would start to eat into pay-TV subscriptions. Yet this may ultimately be a red herring, as it predicted that pay-TV's biggest threat could originate from content owners seeing new, direct distribution models delivering content to the key millennial market.