Major US pay-TV providers post weakest ever quarterly additions

DetailsEditor | 15 May 2015

Leichtman Research Group has posted worrying statistics showing Q1 2015 was the weakest first quarter for pay-TV net adds since it began tracking the industry over a decade ago.

In its analysis, LRG found that the 13 largest pay-TV providers in the US, representing about 95% of the market, added fewer than 10,000 net video subscribers in Q 1 2015, compared with a gain of over 250,000 video subscribers a year earlier.

Such providers, said LRG, account for nearly 95.2 million subscribers, with the top nine cable companies having about 49.2 million video subscribers, satellite TV companies having over 34.2 million subscribers, and top telephone companies having over 11.7 million subscribers.

Overall for the past year, pay-TV providers lost about 370,000 subscribers compared to a loss of about 65,000 subscribers over the prior year.

As tracked by other firms, the survey found that the cable industry was certainly in the mire, with the leading nine companies in the sector losing about 60,000 video subscribers in Q1 2015. This was 50,000 in Q1 2014.

Satellite TV providers lost 74,000 subscribers in Q1 2015, compared with a gain of 52,000 in Q1 2014. Consistent with the poor overall pay-TV performance, total DBS net adds in Q1 2015 were the fewest in any first quarter, and fourth lowest in any quarter since LRG began tracking the industry.

IPTV providers actually added 140,000 video subscribers in Q1 2015, yet this was still down compared with Q1 2014 that saw 251,000 net additions. That said, in Q1 2014 net video adds for the Telcos in Q1 2015 were the fewest in any quarter since Q4 2006.

"The traditionally strong first quarter for the pay-TV industry did not prove to be so this year. Despite virtually breaking even in the quarter, the first quarter of 2015 marked the first significant sign of an acceleration in pay-TV subscriber losses," said Bruce Leichtman, president and principal analyst for Leichtman Research Group. "In addition to changes in consumer demand for video services spurred by competition from alternatives, the decline of about 0.4% of subscribers over the past year was also driven by several providers becoming more discerning in customer acquisition and retention, focusing on higher-value/lower-churn customers at the expense of the volume of subscribers."