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Headline, Industry News
TV Subscriptions Fall for First Time as Viewers Cut the Cord
Wednesday March 19th 2014The pay-television market is passing its prime.
The number of Americans who pay for TV through cable, satellite or fiber services fell by more than a quarter of a million in 2013, the first full-year decline, according to research firm SNL Kagan. If the slide continues in the coming years, that means 2012 was the industry’s high point.
It’s not that viewers are watching less video. Online-streaming services from Netflix Inc. (NFLX) and Amazon.com Inc. (AMZN) continue to draw more users with shows like “House of Cards,” charging fees of less than $10 a month. What’s changed is that fewer people are willing to shell out $40 a month or more for the wider menu of cable channels.
The decline is small so far. Video subscribers across the entire pay-TV industry, which includes Comcast Corp. (CMCSA), DirecTV and Verizon Communications Inc. (VZ), dropped by 251,000 last year to about 100 million, SNL Kagan said in a statement today.
The industry has seen this coming for a while; research firm IHS said in August that TV subscriptions would decline to 100.8 million from 100.9 million in 2013. And cable companies have been suffering declines for years as satellite and phone carriers wrested away market share. In fact, DirecTV (DTV), Verizon and their ilk still gained TV subscribers last year — just not enough to make up for 2 million lost cable subscribers.
Pay-TV carriers have been preparing for this inflection point by developing services for watching video on tablets and smartphones. They’re also investing to boost Internet speeds as broadband services become more popular, often at the expense of TV subscriptions.
Netflix Deal
As more consumers sign on to streaming offerings such as Netflix, Internet speeds have become important when choosing a broadband provider. Companies like Time Warner Cable Inc. (TWC) have seen competition from telecommunications services like Verizon, which touts its fiber-optic technology and higher speeds.
Comcast struck a deal last month with Netflix to grant the streaming-video company more dependable delivery of shows and movies for an undisclosed price, ensuring the cable company could continue to be a middleman between viewers and video creators.
Philadelphia-based Comcast is also seeking regulatory approval for its $45 billion acquisition of Time Warner Cable, giving it more subscribers to increase its influence over cable networks in fee negotiations.
Cable providers have also been able to squeeze more revenue from each user to help maintain growth. Comcast’s customers paid an average of $78.68 a month for video alone last quarter, up 3 percent from a year earlier.
‘Cord-Nevers’
Still, the industrywide drop last year in video subscriptions suggests there’s a limit to what Americans are willing to pay for their TV fix. Even more worrisome for pay-TV providers, a new generation of young adults hasn’t gotten into the habit of paying for video.
“The market’s decline can be traced in part to the growing number of so-called ‘cord-nevers’ — those who object to ever having a pay-TV subscription,” IHS said in August. “Equally as important, the price of a typical pay-TV subscription remains high, staying well out of reach for a number of consumers.”
Even an expansion of U.S. housing last year — normally a surefire source of growth — wasn’t enough to give the pay-TV industry a subscriber boost, SNL Kagan said.
“While seasonally driven quarterly declines have become routine for industry watchers, the annual dip illustrates longer-term downward pressure even as economic conditions gradually improve,” the research firm said.
Source: Bloomberg
Headline, Industry News
TV Subscriptions Fall for First Time as Viewers Cut the Cord
Wednesday March 19th 2014The pay-television market is passing its prime.
The number of Americans who pay for TV through cable, satellite or fiber services fell by more than a quarter of a million in 2013, the first full-year decline, according to research firm SNL Kagan. If the slide continues in the coming years, that means 2012 was the industry’s high point.
It’s not that viewers are watching less video. Online-streaming services from Netflix Inc. (NFLX) and Amazon.com Inc. (AMZN) continue to draw more users with shows like “House of Cards,” charging fees of less than $10 a month. What’s changed is that fewer people are willing to shell out $40 a month or more for the wider menu of cable channels.
The decline is small so far. Video subscribers across the entire pay-TV industry, which includes Comcast Corp. (CMCSA), DirecTV and Verizon Communications Inc. (VZ), dropped by 251,000 last year to about 100 million, SNL Kagan said in a statement today.
The industry has seen this coming for a while; research firm IHS said in August that TV subscriptions would decline to 100.8 million from 100.9 million in 2013. And cable companies have been suffering declines for years as satellite and phone carriers wrested away market share. In fact, DirecTV (DTV), Verizon and their ilk still gained TV subscribers last year — just not enough to make up for 2 million lost cable subscribers.
Pay-TV carriers have been preparing for this inflection point by developing services for watching video on tablets and smartphones. They’re also investing to boost Internet speeds as broadband services become more popular, often at the expense of TV subscriptions.
Netflix Deal
As more consumers sign on to streaming offerings such as Netflix, Internet speeds have become important when choosing a broadband provider. Companies like Time Warner Cable Inc. (TWC) have seen competition from telecommunications services like Verizon, which touts its fiber-optic technology and higher speeds.
Comcast struck a deal last month with Netflix to grant the streaming-video company more dependable delivery of shows and movies for an undisclosed price, ensuring the cable company could continue to be a middleman between viewers and video creators.
Philadelphia-based Comcast is also seeking regulatory approval for its $45 billion acquisition of Time Warner Cable, giving it more subscribers to increase its influence over cable networks in fee negotiations.
Cable providers have also been able to squeeze more revenue from each user to help maintain growth. Comcast’s customers paid an average of $78.68 a month for video alone last quarter, up 3 percent from a year earlier.
‘Cord-Nevers’
Still, the industrywide drop last year in video subscriptions suggests there’s a limit to what Americans are willing to pay for their TV fix. Even more worrisome for pay-TV providers, a new generation of young adults hasn’t gotten into the habit of paying for video.
“The market’s decline can be traced in part to the growing number of so-called ‘cord-nevers’ — those who object to ever having a pay-TV subscription,” IHS said in August. “Equally as important, the price of a typical pay-TV subscription remains high, staying well out of reach for a number of consumers.”
Even an expansion of U.S. housing last year — normally a surefire source of growth — wasn’t enough to give the pay-TV industry a subscriber boost, SNL Kagan said.
“While seasonally driven quarterly declines have become routine for industry watchers, the annual dip illustrates longer-term downward pressure even as economic conditions gradually improve,” the research firm said.
Source: Bloomberg
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Headline, Industry News
TV Subscriptions Fall for First Time as Viewers Cut the Cord
Wednesday March 19th 2014The pay-television market is passing its prime.
The number of Americans who pay for TV through cable, satellite or fiber services fell by more than a quarter of a million in 2013, the first full-year decline, according to research firm SNL Kagan. If the slide continues in the coming years, that means 2012 was the industry’s high point.
It’s not that viewers are watching less video. Online-streaming services from Netflix Inc. (NFLX) and Amazon.com Inc. (AMZN) continue to draw more users with shows like “House of Cards,” charging fees of less than $10 a month. What’s changed is that fewer people are willing to shell out $40 a month or more for the wider menu of cable channels.
The decline is small so far. Video subscribers across the entire pay-TV industry, which includes Comcast Corp. (CMCSA), DirecTV and Verizon Communications Inc. (VZ), dropped by 251,000 last year to about 100 million, SNL Kagan said in a statement today.
The industry has seen this coming for a while; research firm IHS said in August that TV subscriptions would decline to 100.8 million from 100.9 million in 2013. And cable companies have been suffering declines for years as satellite and phone carriers wrested away market share. In fact, DirecTV (DTV), Verizon and their ilk still gained TV subscribers last year — just not enough to make up for 2 million lost cable subscribers.
Pay-TV carriers have been preparing for this inflection point by developing services for watching video on tablets and smartphones. They’re also investing to boost Internet speeds as broadband services become more popular, often at the expense of TV subscriptions.
Netflix Deal
As more consumers sign on to streaming offerings such as Netflix, Internet speeds have become important when choosing a broadband provider. Companies like Time Warner Cable Inc. (TWC) have seen competition from telecommunications services like Verizon, which touts its fiber-optic technology and higher speeds.
Comcast struck a deal last month with Netflix to grant the streaming-video company more dependable delivery of shows and movies for an undisclosed price, ensuring the cable company could continue to be a middleman between viewers and video creators.
Philadelphia-based Comcast is also seeking regulatory approval for its $45 billion acquisition of Time Warner Cable, giving it more subscribers to increase its influence over cable networks in fee negotiations.
Cable providers have also been able to squeeze more revenue from each user to help maintain growth. Comcast’s customers paid an average of $78.68 a month for video alone last quarter, up 3 percent from a year earlier.
‘Cord-Nevers’
Still, the industrywide drop last year in video subscriptions suggests there’s a limit to what Americans are willing to pay for their TV fix. Even more worrisome for pay-TV providers, a new generation of young adults hasn’t gotten into the habit of paying for video.
“The market’s decline can be traced in part to the growing number of so-called ‘cord-nevers’ — those who object to ever having a pay-TV subscription,” IHS said in August. “Equally as important, the price of a typical pay-TV subscription remains high, staying well out of reach for a number of consumers.”
Even an expansion of U.S. housing last year — normally a surefire source of growth — wasn’t enough to give the pay-TV industry a subscriber boost, SNL Kagan said.
“While seasonally driven quarterly declines have become routine for industry watchers, the annual dip illustrates longer-term downward pressure even as economic conditions gradually improve,” the research firm said.
Source: Bloomberg
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