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US IPTV numbers rise as cable plummets

IPTV is the only segment of the US pay-TV market to record a rise in subscriptions, startling figures for the second quarter published this week reveal.

Research from analytics provider IHS showed that US pay-TV subscriber numbers plummeted by an overall 352,000 year on year. Cable, which IHS calls an “embattled business”, lost 588,000 subs, down marginally on last year’s 598,000. Satellite losses almost trebled, from 62,000 to 162,000.

On the other hand, IPTV providers, including AT&T Universe and Verizon FiOS, added 398,000 net new subs – a rise of 31% on the same period last year.

Overall, IHS says cable still accounts for 55% of the US pay-TV market, while satellite holds 34% and IPTV 11%.

IHS analyst for US TV Erik Brannon said: “Of the three segments in the US pay TV market, the IPTV sector is enjoying growth, especially in urban areas where it is luring subscribers away from satellite.”

“Satellite’s lack of a true high-speed internet service or a triple-play bundling option puts it at a disadvantage when competing against IPTV and cable. Cable, meanwhile, has its own problems, including disagreements between operators and content providers over rising programming costs that squeeze customers in the middle.”

Brannon said the ongoing battle between CBS and Time Warner Cable over retransmission fees – which has seen TWC’s subscribers locked out of CBS programming – “demonstrates the kind of difficulties that cable could endure in the future”.

Pay-TV overall shrank by 146,000 in the first six months of this year. IHS predicts that 2013 will be the first year to see an overall drop in US pay TV subs, declining from 100.89 million to 100.77 million.

IHS says the decline in pay-TV is in part down to a rise in so-called “cord-nevers” – people who prefer to receive programming from OTT services like Netflix rather than via pay-TV.

The firm says that US telcos AT&T and Verizon appear to be bucking the trend. AT&T’s Uverse attracted 233,000 new subscribers in the second quarter, marking its second-largest increase since 2009. Verizon’s FiOS, meanwhile, gained 140,000 subscribers.

IHS believes that consumers are more likely to keep their cellular and high-speed data service than a costly pay-TV subscription. “A typical pay-TV subscription remains high, staying well out of reach for a number of consumers,” IHS added.

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