Multiscreen services convincing US to resist cord-cutting

Pay-TV subs numbers in the United States remain relatively resilient despite rising costs to customers and the growth of alternative online video subscription services. The informitv Multiscreen Index shows that top 10 pay-TV services reporting figures lost 165,500 digital television customers in the seasonally weak second quarter of 2014. This represents just 0.2% of their combined subscriber base of more than 87 million homes.

Service providers in the United States have generally lost subscribers in the second quarter in recent years, but 2014 saw a reduction in net losses, compared to 274,700 in the same quarter in 2013 and 207,700 in 2012.

There have been net gains in every other quarter over the last two years, despite much debate about cord cutting. The Multiscreen Index shows that the total number of subscribers across the top 10 is up by over 400,000 year on year and over 1.5 million over two years.

“Changes in subscriber numbers should be viewed in the context of seasonality, relative scale, and overall market size,” says Dr William Cooper, the editor of the Multiscreen Index. “In an increasingly competitive mature market, the longer-term trend is that satellite and telco providers have been gaining customers, generally at the expense of cable companies.”

  • DIRECTV, DISH Network, AT&T and Verizon gained video customers over the year, while Comcast, Time Warner Cable, Charter and Mediacom all lost video subscribers.
  • DIRECTV and DISH Network added 249,000 television subscribers over the year, a significant improvement on 60,000 for the previous year.
  • AT&T U-verse and Verizon FiOS gained 1.23 million video customers over the year, compared to a 1.41 million increase the previous year.
  • Comcast and Time Warner Cable, which are planning to merge their operations, lost 296,000 television subscribers in the second quarter and 910,000 over the year.
  • Average revenue per subscriber has been increasing across the board.

US customers appear to be adopting lower cost online video subscription services such as Netflix in addition to pay-TV, rather than as a substitute. Pay-TV providers have responded to the threat and opportunity of online delivery with a range of multiscreen services and so far the strategy appears to have been successful.

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