U.S. multichannel video industry has first-ever annual net subscriber loss

Monday, May 20th, 2013 
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Major Providers Added About 195,000 Subscribers in Q1 2013 — Down From Recent First Quarters

Durham, NH — Leichtman Research Group, Inc. (LRG) found that the thirteen largest multi-channel video providers in the US — representing about 94% of the market — added about 195,000 net additional video subscribers in Q1 2013. Quarterly net multi-channel video gains in Q1 2013 were down compared to a net gain of about 445,000 in Q1 2012, and a net gain of about 470,000 in Q1 2011.

These Q1 gains were not enough to offset subscriber losses from Q2 and Q3 2012, leaving major multi-channel video providers with a net loss of about 80,000 subscribers over the past year, compared to a net gain of about 380,000 over the prior year. This marks the first time there has been a net industry-wide subscriber loss over a four-quarter period (since LRG began tracking the industry over a decade ago).

Other key findings include:

  • The top multi-channel video providers account for about 94.9 million subscribers — with the top nine cable companies having over 51.0 million video subscribers, satellite TV companies having 34.2 million subscribers, and top telephone companies having nearly 9.7 million subscribers
  • The top nine cable companies lost about 264,000 video subscribers in Q1 2013, and about a 1,560,000 over the past year — compared to a loss of about 1,535,000 subscribers over the prior year
  • The top telephone providers added 401,000 video subscribers in Q1 2013, and 1,319,000 over the past year — compared to 1,475,000 net additions over the prior year
  • Satellite TV providers added 57,000 subscribers in Q1 2013 — the fewest in any Q1 over the past decade
  • Satellite TV providers added 160,000 subscribers over the past year — compared to a gain of 439,000 over the prior year

“First-time ever annual industry-wide losses reflect a combination of a saturated market, an increased focus from providers on acquiring higher-value subscribers, and some consumers opting for a lower-cost mixture of over-the-air TV, Netflix and other over-the-top viewing options,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “The traditionally weak second quarter is sure to show additional net subscriber losses, but it is unlikely that these current modest industry losses are a harbinger of a more dramatic near-term market decline.”

                              Subscribers      Net Adds      Net Adds
Multi-channel Video Provider  at end 1Q13    in Q1 2013  in Past Year
----------------------------  -----------  ------------  ------------
Cable Companies
 Comcast                       21,935,000      (60,000)     (359,000)
 Time Warner^                  12,100,000     (118,000)     (553,000)
 Charter                        4,124,000      (34,000)     (217,000)
 Cablevision^                   3,191,000       (6,000)      (66,000)
 Suddenlink                     1,211,900           700      (35,300)
 Mediacom                         999,000       (1,000)      (60,000)
 Cable ONE                        588,180       (5,435)      (34,159)
 Other Major Private
  Cable Companies*              6,895,000      (40,000)     (235,000)
Total Top Cable                51,044,080     (263,735)   (1,559,459)

Satellite TV Companies (DBS)
 DIRECTV                       20,105,000        21,000       139,000
 DISH Network                  14,092,000        36,000        21,000
Total Top DBS                  34,197,000        57,000       160,000

Telephone Companies
 Verizon FiOS                   4,895,000       169,000       542,000
 AT&T U-verse                   4,768,000       232,000       777,000
Total Top Phone                 9,663,000       401,000     1,319,000
----------------------------  -----------  ------------  ------------
Total Multi-channel Video      94,904,080       194,265      (80,459)

Sources: The Companies and Leichtman Research Group, Inc.
* Includes LRG estimates for Cox and Bright House Networks
^ Includes former Bresnan properties with sale pending to Charter

Net additions reflect pro forma results from system sales and acquisitions
Top multi-channel video providers represent approximately 94% of all subscribers
Top cable companies do not include WOW
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