So much for all the news about TV "cord cutting". I've always thought that was a meme of the tech elite that really wasn't borne out by the mass market. Who knows what the future may hold, but today those cords are not getting cut very often.
At this point in the maturity cycle of the TV delivery market it's more like "cord shifting" from one provider to another, primarily from cable companies to telephone companies, but there are winners and losers in each group.
via onlinereporter.com press release:
U.S. Pay-TV Market Defies the Recession; Subscriptions Increase by 362,000
BATON ROUGE, La., March 11 /PRNewswire/ -- The economic downturn has not stopped growth in the U.S. pay-TV market, according to a study by Rider Research, which publishes the newsweekly The Online Reporter. While the increase could eventually turn negative as more people lose their jobs, the study indicates there is still strong demand among consumers for video entertainment in the home.
The number of U.S. pay-TV subscribers grew by 362,000 during the fourth quarter of 2008, a quarter in which most consumer products and services reported strongly negative results. The report is based on data in the phone, cable and satellite TV companies' quarterly financial reports.
As a group, the telephone companies won in net adds with 567,000, compared to the satellite companies' 199,000 (thanks solely to DirecTV's 301,000 increase), while the reporting cable TV companies lost 404,000. The telcos' numbers do not include the subscriptions they sold for the satellite TV services.
The three big winners were Verizon, which added 303,000, DirecTV with 301,000, and AT&T with 264,000.
The three big losers were Comcast, which lost 233,000 subscribers, Time Warner Cable with a loss of 197,000 and Dish Network with a 102,000 drop.
Without the telcos, DirecTV and Dish probably would not have as many subscribers as they have. Between them, AT&T, Verizon, Qwest, Embarq and Windstream have sold almost 5 million pay-TV subscriptions for the satcos.
The satcos are continuing to creep up on the cablecos. The two satcos have a combined 31.5 million subscribers, 43 million for the cablecos, not including Comcast, Charter and Bright House.
not including Comcast, Charter and Bright House
Which basically makes that 43 million number worthless, no?
Ironically, the above press release is just trying to get in on a meme that’s 10 days old! There were a bunch of stories then:
http://www.tvweek.com/news/2009/03/column_where_are_cordcutters_s.php
Money quote from Craig Moffett: cord cutting “remains the province of urban myth.”
These numbers are partially due to the new change-over to digital-only television and the 4th quarter drops in the costs of HDTV’s on the market. If you buy an HDTV you will want HD programming to go with it. Plus these numbers don’t talk about [i]what/i] price level these new subscriptions are. There were big sales from DirecTV and DishNetwork where you can get 200+ channels including a huge amount in HD for less than $50. That makes it worth the money when they saved big on a new HDTV.
I think people want a distraction form the tough economic times- same reason that the film industry is thriving right now!
As the economic crisis deepens, there will inevitably be a contraction in the number of cabled households, and thereafter, a dip in cable viewership. Watch for this phenomena to surface most noticeably in the most ravaged real estate markets.
Broadcast television, which is experiencing its own contraction associated with the DTV transition, should be able to pick up market share during this period as ex-cablers rig up antennas or find those dusty set-top rabbit ears tucked away in a cabinet many years ago.
In the 2008-9 season, there have already been two weeks with year-over-year contractions in cable average weekly households, and that’s for the first time ever in my tracking of cable and broadcast numbers.
Cable/satellite penetration is due to experience its first ever contraction, one that I expect will see a winnowing out of the weaker players as cable carriers narrow down packages and subscriber costs in an effort to retain economically pressed customers.
dumont, the point of this is that despite all the doom and gloom predictions, there’s no evidence whatsoever to support it.
Julia, I am seeing early trend evidence. There the two weeks of year-over-year cable household contraction so far this season, as I mentioned earlier.
In the first 13 weeks of the 2008-9 season, all cable HH grew by 6.1% year-over-year. In weeks 14-20, all cable HH grew by only 1.9%.
In the first 13 weeks of the 2008-9 season, all broadcast HH contracted by -6.0% year-over-year, and in weeks 14-20, all broadcast HH has seen continued contraction of -6.1%.
Given the vector of the trends, I am looking forward to the spring and summer seasons for the following to happen:
1. The all cable HH count could see its first ever seasonal dip in year-over-years, perhaps during spring season, more likely during the summer where in the past cable has shown strength while broadcast fell through the floor.
2. Broadcast HH will see a third season (spring) increase in year-over-year numbers, in part due to comparison against last years strike-addled spring season, but also due in part to a re-surgence in broadcast as economically-challenged households scale down or ‘cut the cord’ to cancel their cable packages.