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Cable, Satellite Slip; Internet TV Rises

21 Aug, 2013 By: Doug McPherson

EL SEGUNDO, Calif. – The only segment of U.S. pay TV that grew subscribers during second-quarter 2013 was Internet protocol television (IPTV), while cable and satellite numbers plummeted according to new figures from analytics provider IHS.

U.S. IPTV providers including AT&T Uverse, Verizon FiOS and others added of 398,000 subscribers compared with 304,000 in 2Q 2012, IHS revealed.

Overall pay-TV subscriptions fell by 352,000 year-on-year. Cable, which IHS calls “an embattled business,” lost 588,000 subscriptions, slightly less than last year’s 598,000. Satellite losses nearly tripled year-on-year – from 62,000 to 162,000. Cable accounts for 55 percent of the market, satellite 34 percent and IPTV 11 percent of the pay TV market.

Erik Brannon, analyst for U.S. television at IHS, said IPTV is seeing growth in urban areas where it’s luring subscribers away from satellite. “In particular, satellite’s lack of a true high-speed Internet service or a triple-play bundling option puts it at a disadvantage when competing against IPTV and cable,” Brannon added. “Cable, meanwhile, has its own problems, including disagreements between operators and content providers over rising programming costs that squeeze customers in the middle.”

An overall shrinking of pay TV by 146,000 for the first six months of this year represents the first time the industry has seen a net loss that deep into a year. Plus, IHS predicts 2013 will be the first full year to see an overall drop in U.S. pay TV subscriptions, falling from 100.9 million to less than 100.8 million.

IHS attributed the decrease to “so-called cord-nevers,” customers who prefer to get programming from over-the-top services such as Netflix than via a pay TV subscription. The research firm added: “A typical pay-TV subscription remains high, staying well out of reach for a number of consumers.”

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