Industry faces steeper losses even as housing market shows signs of recovery, according to Wall Street analyst Craig Moffett
The number of Americans jettisoning pay TV is still fairly small — but data clearly shows that cord-cutting is picking up the pace as the cost of cable and satellite TV service continues to climb skyward.
The U.S. pay TV sector as a whole lost 316,000 subscribers for the 12-month period ending in June, even as the housing market shows signs of recovering, Moffett Research analyst Craig Moffett wrote in a research report Tuesday.
“Cord cutting used to be an urban myth. It isn’t anymore,” Moffett Research analyst Craig Moffett wrote in a research report Tuesday. “No, the numbers aren’t huge, but they are statistically significant.”
The latest figures showing the industry decline — which has hit cable operators including Comcast and Time Warner Cable the hardest — comes after pay-TV providers shrank subscriber rolls 80,000 on a year-to-year basis in the first quarter of 2013, according to an analysis by Leichtman Research Group.
The second quarter is seasonally weak for pay TV, given that colleges shut down and “snow birds head north,” Moffett noted. But for the 12 months ending June 30, pay TV subscribership fell about 0.3% whereas subscribership rose 330,000 (up 0.3%) for the 12-month period ending Q2 2012, according to Moffett, a longtime industry analyst who for years has warned about the affordability problem of pay TV services.
In the face of customer losses, cable and satellite TV operators say they’re focusing on higher-value subscribers, willing to sacrifice bargain-hunting consumers who at satisfied with over-the-top video options like Netflix and free broadcast TV.
In the second quarter, cable operators lost a cumulative 591,000 video subscribers in the second quarter, which actually was better than the 606,000 sequential decline in Q2 2012. Telephone companies AT&T and Verizon grew in the most recent period — adding 231,000 and 140,000 video subs, respectively — while both satcasters lost ground (DirecTV dropped 84,000 U.S. video customers in the period, and Dish Network lost 78,000).