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Kagan: Pay TV Subs Rise in Q4

Pay Television operators reported small gains in multichannel video customers in the fourth quarter and full year 2012, reversing losses in the second and third quarters of the year, according to a report by SNL Kagan.

In a report Wednesday, SNL Kagan said total multichannel video customers rose by about 51,000 subscribers in the fourth quarter to 100.4 million. For the full year, the sector added about 46,000 video customers, as strong gains in telco video and continued improvement for cable operators helped negate seasonal losses in the second and third quarters during the year.

For the year, SNL Kagan estimates that U.S. cable video customers declined to 56.4 million (from 58 million in 2011), satellite TV subscribers grew to 34.1 million and telco video customers grew to 9.9 million.  

Cable operators had a strong first quarter – the four top publicly traded MSOs, led by Comcast, lost a collective 104,000 video customers, a 30% improvement over the prior year. But seasonal declines in the second and third quarters erased those gains.

While Kagan said that outside factors like high unemployment and the impact of Superstorm Sandy still weigh on the industry, the modest rise in subscriber growth for the quarter and the year “suggests the segment is not rebounding with the broader economy and customer formation is lagging the rebounding housing market.”

Kagan cited fourth quarter 2012 figures from the U.S. Census Bureau housing survey, which state that occupied housing ticked up by about 500,000 new units, including occupied, seasonal and occasional-use households. Kagan added that the metric points to an additional 974,000 occupied, seasonal and occasional-use homes for the full year 2012, more than 21 times the increase in multichannel customers during the same period.

That has resulted in a decline in multichannel penetration, according to Kagan, with the three platforms (cable, satellite and telco) accounting for 84.7% of occupied homes in the U.S., down from 87.3% in the first quarter of 2010.

While cable seems to be making headway in improving its losses, Kagan noted that growth is beginning to slow at satellite and telco video operators. Satellite TV service providers added about 288,000 net new customers in 2012, according to Kagan, down from the nearly 500,000 they added in 2011. And telcos are also feeling the pinch – growth slowed to 1.4 million additions in 2012 compared to 1.6 million in 2011, according to Kagan.