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TV viewers still wired

Operators gained over 250,000 subs in 2010

Despite losing TV subscribers for the first time ever throughout last year, fueling speculation that cord-cutting had gained traction, operators finished up 2010 with a net gain of more than 250,000 subs.

The gains of 253,000 customers is likely to mute for a while talk of cord-cutting’s impact on cable, satellite and telco outfits, but it surely isn’t going away — especially for the largest cable operators. Gains by satcasters DirecTV and Dish Network and telcos AT&T and Verizon offset steep losses at the largest cable operators, including Comcast and Time Warner Cable.

“The buzz about (over the top video) substitution is likely to only be temporarily quieted,” said Ian Olgeirson, an analyst at research firm SNL Kagan. “Major challengers continue to look for ways to build an appealing alternative … it is probable that (over the top) substitution will make subscriber growth for the segment more difficult to sustain quarterly in the future.”

There was barely a conference call in 2010 for both distributors and programmers in which cord-cutting, the idea that people are dropping TV subscriptions to watch movies and TV shows online through services like Hulu and Netflix, wasn’t a major topic.

Charter Communications reported fourth-quarter and full-year results Tuesday, the last of the major distributors to post numbers and allowing for the latest tally on subs. While Charter lost 304,000 basic TV subs in 2010, the yearly gains were largely attributable to thebig telcos like Verizon and AT&T, which are still in growth mode on their nascent tv services. Sat-TV providers DirecTV and Dish Network were also in positive territory. The cable guys bled basic TV subscribers, but most companies reported that losses had eased as the year went along. It wasn’t clear whether cable was losing subs outright, or whether they were defecting to satellite and the phone companies.

Analysts remain skeptical that cord-cutting is happening because of the lure of the Internet.

“For our part, we continue to attribute the weakness in 2010 primarily to issues of affordability rather than technology,” said Sanford Bernstein analyst Craig Moffett.

“To be sure, the story of the 30-something technocrat surfing the Web on a $2,000 media center PC — sorry, I meant Mac — with access to the world’s digital treasures at his or her fingertips is an alluring one. But the evidence suggests instead that we are seeing defections from the bottom of the economic ladder, spurred in part by a return to over-the-air broadcast TV.”

Despite sub losses, most companies reported that the revenues they receive per subscriber actually grew, as customers migrated to more expensive tiers.

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