U.S. Adds 1.7 Million Multi-Channel Video Subscribers Over the Past Year

Little Indication of Consumers “Cutting the Cord” to Video Services

DURHAM, NH — Leichtman Research Group, Inc. (LRG) found that the largest cable, satellite, and Telco TV providers in the US acquired over 1.7 million net additional multi-channel video subscribers over the past year. While the top ten cable companies cumulatively lost about 1.4 million cable TV subscribers in the year-long period through the end of the first quarter of 2010, these losses were more than offset by a gain of 1.33 million satellite TV subscribers (from DIRECTV and DISH Network), and 1.78 million subscribers to Telco TV services (from Verizon FiOS and AT&T U-verse). In the first quarter of 2010 alone, the multi-channel video industry as a whole added about 580,000 subscribers.

New consumer research from LRG complements these figures:

• In areas where cable TV is available, 89% of households with a TV set subscribe to some form of multi-channel video service — an all-time high
• In areas where cable TV is available, 66% of multi-channel video subscribers get cable — compared to 79% in 2004
• The mean annual household income of multi-channel video subscribers (where cable is available) is 59% higher than that of non-subscribers
• Just 1% of current non-subscribers to a TV service do not subscribe because they can watch all that they want on the Internet or in other ways. None of these non-subscribers reported dropping a video service in the past year
• 11% of satellite TV subscribers, 9% of cable TV subscribers, and 5% of Telco TV subscribers are likely to switch from their current provider in the next six months — figures that are similar to previous surveys
• Less than 1% of cable subscribers who are likely to switch mention getting all the programs they want on the Internet or in other ways as a reason for potentially switching

These findings are based on a telephone survey of 1,600 randomly selected households from throughout the United States and are part of a new LRG study, Cable, DBS & Telcos: Competing for Customers 2010.

“The number of US households subscribing to some form of multi-channel video service is at an all-time high,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “Multi-channel video industry gains will likely be slower in the coming year than they were in the past year, due to the saturated market, coupled with tepid new housing growth, and a slowdown in the rollout of Telco TV services. Consumers’ decisions to disconnect from multi-channel video services to only watch video from other sources are unlikely to have a substantial impact on the market in the near-term.”