Will the Last Pay-TV Subscriber Please Turn Off the Set?

While things are hardly as dire for the pay-TV industry as my title might suggest, subscription numbers for the first quarter of 2015 are far from rosy. In fact, net pay-TV adds were the lowest they’ve been in ten years.

So says Leichtman Research Study Group in their most recent analysis of the pay-TV industry.

While the first quarter of the year has typically been the strongest for adding new subscribers (due, in large part, to holiday television gift giving), Leichtman reports that the top 17 cable and telephone companies added less than 10,000 net new video subscribers in the first quarter of 2015, compared to 250,000 adds in the same time period a year previous.

Phone companies were a bright spot among the top U.S. pay-TV providers, adding a combined 140,000 new customers in the first quarter of the year: Verizon FiOS added 90,000 subscribers, and AT&T U-verse added 50,000. DBS providers were down 74,000 subscribers, with DirecTV up 60,000 and DISH down 134,000. Cable companies were down 58,264 subscribers, with Time Warner up 33,000 and Mediacom up 1,000. Others more than counteracted these gains, however—Cable ONE was down 29,884 subscribers, Cablevision 28,000, Comcast 8,000, and Suddenlink 6,400. Read more

Like the Winter’s Snow, Pay TV Subscribers Continue to Slowly Recede

On the heels of a drop of 95,000 subscribers in 2013, the pay TV industry lost another 125,000 in 2014 according to data compiled by Leichtman Research Group (LRG).

But is this a thing? Perhaps not—given that LRG estimates the top pay TV providers serve in excess of 95 million customers, these losses may amount to no more than a drop in the proverbial bucket.

Telephone companies fared the best according to LRG, adding more than 1 million video subscribers in 2014. DBS providers added 20,000.   These gains were erased by the top cable companies, who lost a collective 1.2 million subscribers, or nearly 2.5% of their customer base. The biggest declines were posted by Cable ONE (down 19%), Mediacom (6%), Cablevision (5%), and Suddenlink (4%.) Comcast lost the fewest customers among the cable companies, down less than 1%. Read more

Netflix and ‘House of Cards’: The Numbers Don’t Lie

There’s a reason why the ice storm that struck the D.C. area this past weekend—Mother Nature’s latest insult in this seemingly interminable winter of 2015—didn’t sting quite as much as it might have: on Friday, Netflix made the entirety of the third season of its political thriller “House of Cards” available for viewing. Let the binge watching commence!

The series, which debuted in 2013, marked a significant gamble for Netflix. The company was in the process of morphing from a mail-based DVD distributor to a provider of streaming video content. Yet without a way to differentiate themselves from other online content providers, Netflix’s market share would never be truly secure. The key to the service’s ongoing viability would be coming up with something that nobody else could provide consumers. It rolled the dice with Frank Underwood and “House of Cards.” Read more

I’ll Have Two Large Videos, Hold the Ads, Please

In a widely anticipated move, Google announced plans to launch a YouTube subscription service that would spare viewers from the advertising that appears both before and during selected videos.

(Google purchased YouTube in 2006 in a transaction valued at $1.65 billion.)

Dubbed “YouTube Music Key,” the service is designed to compete with companies such as NetFlix.

Pricing for YouTube Music Key will start at $7.99 per month, and, in addition to removing advertising, will also allow viewers to watch videos offline and listen to music while using other applications. Read more

The Snowball Keeps Rolling Downhill: IPTV Market Up 14% Worldwide in 2014

The worldwide pay-TV market is estimated to have grown by 5% in 2014, encompassing more than 924 million subscribers, according to technology market intelligence company ABI Research.

“IPTV is expected to grow a market-leading 14% in 2014, followed by satellite TV platform at 7%,” said ABI Research vice president and practice director of core forecasting Jake Saunders. “The growth rates of cable and terrestrial TV platforms are expected to slow to around 3%.”

Much of the worldwide growth is driven by countries in the Asian-Pacific and Latin American regions, combining to add 13 million subscribers in 2014. By contrast, the North American cable TV market is expected to shrink by 1% in 2014. Cable TV operators in North America lost 400,000 customers in the third quarter of 2014 alone, ABI Research reports.

In the increasingly competitive marketplace, providers are trying to grow revenues by offering high definition (HD) channels, advance services and premium content. “The worldwide HD subscriber base is growing on all pay-TV platforms,” said Khin Sandi Lynn, ABI Research industry analyst. “Approximately 57% of total pay-TV subscribers will be HD subscribers by 2019. ABI Research forecasts the global pay-TV market will generate US$324 billion in service revenues by 2019.”

Whooo…Lives in a Pineapple, Over-the-Top?

Viacom, Inc. announced last week that toddler and tween favorite Nickelodeon will soon join the growing list of cable channels to be made available as a stand-alone Internet offering. For those of you without pre-teens in your household, Nickleodeon is home to the much beloved Spongebob Squarepants, a slightly hyperactive rectangular sponge who “lives in a pineapple under the sea.”

It is expected that Viacom will formally announce details—including the name of the service and its cost—in the coming weeks. It is a matter of speculation whether the online offering will be identical to the channel currently available to consumers, and whether subscribers will be able to access older Nickelodeon content on demand.

According to Viacom CEO Philippe Dauman, the stand-alone Nickelodeon service “will target the fast-growing mobile market [and] will be very attractive for parents and children.”

A number of other channels have preceded Nickelodeon into the over-the-top world. HBO and Showtime will soon launch their own online offerings. Sony Corporation and Dish Network plan to make available online programming packages that had previously only been available by subscribing to a cable or satellite system. And Sony also plans to offer a special programming package—dubbed “PlayStation Vue”—solely to owners of the company’s PlayStation game consoles.

While purchasing over-the-top programming on an a la carte basis does allow consumers a means of customizing programming to match their specific tastes, the reality is that the cost of multiple individual subscriptions quickly surpasses the price of a traditional bundled package.

Sony Unveils PlayStation-Based TV Service

Sony last week announced its long-anticipated online TV service, which the company hopes will pose a formidable challenge to cable and satellite providers.

Dubbed PlayStation Vue, the service initially will offer approximately 75 channels. These will reportedly include CBS, NBC and FOX, as well as USA, FX, Discovery, MTV, the Food Network, Bravo and Comedy Central. Conspicuously absent are ABC’s networks (including the Disney Channel and ESPN) and Time Warner’s channels (which include HBO).

The service initially will be delivered through Sony’s PlayStation 3 and PlayStation 4 game consoles.

While a specific price point has not been publicly announced, it is speculated that PlayStation Vue will cost approximately $60 per month, with no long-term commitment. This price point would make it extremely competitive with cable and satellite service.

“Everyday TV is about to become extraordinary,” Sony Computer Entertainment Group CEO Andrew House said in a statement. “PlayStation Vue reinvents the traditional viewing experience so your programming effortlessly finds you, enabling you to watch much more of what you want and search a lot less.”

Sony plans to offer the service to selected beta testers in the New York area, before expanding to testers in other major markets. PlayStation Vue is expected to be widely available in early 2015.

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