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Cord-Cutting: At Last, Hard Evidence It’s Really Happening

Pay TV sector suffers first-ever net subscriber loss over 12-month period, losing 80,000 over last four quarters

The specter of cord-cutting has finally caught up to American pay TV providers, which have suffered their first net loss of subscribers over a 12-month period, according to an analysis by Leichtman Research Group.

The research firm found that the 13 biggest U.S. cable, satellite and telco TV providers lost about 80,000 subscribers for the 12 months ended March 31, 2013. It’s the first tangible proof that the pay television sector is shrinking.

Previous data has shown year-to-year declines for U.S. pay TV subscribers in specific quarters. But cable and satellite TV are subject to seasonal cycles as customers come and go, and over a full-year period the biz hasn’t declined — until now.

“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,” the firm said.

SEE ALSO: Cable Industry Needs to Confront Cord-Cutting Now

Pay TV providers have been hurt by multiple factors, including subscribers opting for cheaper Internet video options like Netflix and free over-the-air TV along with the fact that subscription television is a saturated market, said LRG prexy Bruce Leichtman. In addition, many operators are focusing on retaining high-value customers to drive up revenue at the expense of price-sensitive consumers.

The 13 pay TV providers, which represent about 94% of the U.S. market, added about 195,000 net additional video subscribers in the first quarter of 2013 — well off a net gain of 445,000 a year prior.

Cable operators were hit the hardest in the previous 12 months, with the nine largest MSOs losing 1.56 million video subscribers between Q1 2012 and Q1 2013. Time Warner Cable alone dropped a whopping 553,000 over that time, and Comcast lost 359,000.

While AT&T and Verizon added 1.32 million over that period, satellite TV providers DirecTV and Dish Network added just 160,000 net subscribers (vs. a gain of 439,000 from first quarter 2011 to Q1 2012).

SEE ALSO: Cord-Cutting Is No Match for Cord-Cuddling

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