Research house IHS Technology added to the growing evidence that cord cutting emerged as a real threat in the second quarter, releasing a study that reports that the pay TV business lost more than 658,000 subscribers in the second quarter, driven by sluggish performance in the IPTV sector.
In its study -- State of the U.S. Pay TV Operator Market – IHS said that IPTV, which includes telcos AT&T and Verizon – reported video customer growth of less than 1% in the period, compared to 3% in the prior year.
“Until the fourth quarter of 2014, IPTV had been the only pay TV category to experience growth; however, by Q2 of this year, IPTV’s significant forward momentum had been lost,” said IHS Technology’s principal analyst of television and media Erik Brannon in a statement.
The IHS report is the latest in a string of research that has shown in the past few months that cord-cutting has reared its ugly head and is becoming a force to be reckoned with in the pay TV industry. Other reports from MoffettNathanson, Leichtman Research Group, SNL Kagan and others have shown that the second quarter was apparently the tipping point for customers to shed their pay TV shackles in significant numbers.
Cable operators showed a very slight improvement in Q2 2015 over Q2 2014, as the effective bundling of faster-than-IPTV broadband and video gave cable TV companies a small local advantage over IPTV. “In much the same way that cable companies had to make room for satellite and IPTV operators, the maturity of IPTV is a signal that U.S. pay TV companies must now strike a balance with over-the-top TV offerings,” Brannon said.
According to the latest IHS State of the US Pay TV Operator Market report, both of the satellite operators in the United States lost significant numbers of video subscribers in Q2 2015. Although Dish attempted to mask losses by including Sling TV subscribers, IHS estimates that the company lost 285,000 total subscribers, while DirecTV lost 133,000, without NFL Sunday Ticket promotions to fall back on.
AT&T U-verse TV experienced its first quarterly loss in Q2, and the company now claims to be focused mainly on high-value subscribers. “AT&T competes with the larger cable operators that are becoming more savvy,” Brannon said. “However the company is less effective against both Comcast and Time-Warner Cable, because U-Verse cannot match the broadband speeds offered by those companies, its service is no longer new in the pay TV market and its prices are very similar to incumbent cable subscriptions.”
Weekly digest of streaming and OTT industry news
Thank you for signing up to Multichannel News. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.