Pay TV Growth Slows in Q1

Public U.S. Pay TV Operators See Net Subscriber Additions Shrink in Typically Strong Period

The nation’s publicly traded pay TV operators collectively added video subscribers in the first quarter, but the lower rate of additions made the traditionally solid quarter a bit of a downer, ISI Group said in a report issued this week.

Those operators, representing about 85% of the U.S. pay TV market, added about 240,000 video subscribers in the first quarter, about half the amount they added in the year-ago period, the research firm said.

“The first quarter of the year is generally strong, but one in which price increases are typically instituted, resulting in churn and marketing opportunities,” ISI Group analysts Vijay Jayant,  Vikash Karlalka and David Joyce wrote in a research note.

Led by Time Warner Cable’s loss of 119,000 video subs, publicly cable operators took in on the chin with a combined loss of 210,000 video subs, offsetting 60,000 net adds by satellite TV operators, and 390,000 net adds by the telcos. DBS growth in the quarter was well off the 185,000 video subs added in the year-ago quarter, while Verizon Communications and AT&T were relatively flat, with combined adds of 390,000, ISI reported.

Cable’s publicly traded MSOs ended the first quarter with 41 million video subs, followed by DBS (34.19 million) and the telcos (9.65 million).  

Public cable operators, meanwhile, continued to dominate U.S. broadband, with about 77% of the subscription adds, improving from 73.8% in the year-ago period.

Despite a loss of 35,000 wireline voice subs at TWC, the overall public U.S. MSO market added 260,000 voice subs, versus AT&T’s and Verizon’s combined loss of 1 million primary access lines. Although cable continues to add voice subs, the pace continues to slow down,  thanks primarily to wireless substitution, ISI Group said.