The Federal Communications Commission has released its 16th annual video competition report to Congress, and the data shows continued declines in cable subscribers, at least as of year-end 2013.
The latest report compares year-end 2013 data to year-end 2012. It is based on comments and data culled from various sources.
The FCC last released a video competition report in July 2013; that one was based on data through June 30, 2012, and report found inroads by online and DBS providers and a general downward trend in cable subs.
In fact, according to the report, between year-end 2012 and year-end 2013, "the total number of MVPD video subscribers posted its first-ever, full-year decline," though not much of one -- from 101 million to 100.9 million households. All of those declines came from cable subscribers, which fell from 56.4 million to 54.4 million, while MVPDs' phone subscribers increased from 9.9 million to 11.3 million.
The report identifies the most significant video competition trends as "the continuing development, and consumer usage, of time- and location-shifted viewing of video programming, the expansion of digital and high-definition programming, and the progress of the online video industry."
The report draws no conclusions about how competitive the market is or isn't, merely summarizing the business models and strategies in various sectors and providing financial and operating data.
While the report said MVPDs' increased revenue from video has come in part by raising prices, it concedes that some data suggests that's because program expenses have increased faster than revenues.
The report found that at the end of 2013, all-digital cable systems served about 57% of the footprints of the top eight cable operators, and switched digital video reached 45%. That is a technology that allows the most popular channels to be delivered in a constant stream and less popular ones only when tuned into by a subscriber.
On the broadcast front, the FCC found that as of 2013, the number of exclusively over-the-air households had increased from 11.2 million to 11.4, although the percentage of such households remained steady at 9.8%. The FCC found that the number of TV stations broadcasting in HD at the beginning of 2014 was 1,517, or 85.7%, which is down from 1,536 at the beginning of 2013.
The FCC said broadcasters continue to provide more programming to viewers in smaller and rural markets by expanding the Big Four networks through multicast channels. It also said broadcasters are responding to the time-shifting, TV everywhere viewer base by offering their content on other screens, including mobile, DTV, VOD, online and social media.
In the online video provider section, the FCC noteds that the industry continues to evolve, that it is expanding its content through more originals and deals with traditional providers, and notes Netflix's move to use own servers and CDNs (content delivery networks) to help deliver its content, content the FCC points out accounted for "34.2 percent of peak period downstream traffic in March 2014, compared with 31.6 percent during the second half of 2013."
FCC commissioner Ajit Pai lamented the tardiness of what is supposed to be an annual report, but said it showed that the marketplace was brimming with competition.
"The Commission’s 16th Video Competition Report is filled with good news. When it comes to video programming, Americans have more choices than ever before," he said in a statement. "They can select from an amazing variety of programming. They can watch that programming on a wide array of devices. And they can view that programming when it is convenient for them. Indeed, the common complaint about television these days isn’t that there isn’t enough quality programming to watch; it’s that there isn’t enough time to watch all of the shows that are generating buzz!"
Pai argues, generally, that the FCC needs to take a light regulatory hand given all that competition.