Though nervousness about the danger of “video cord cutting” seems to be growing, there isn’t much in the third quarter earnings reports to prove the case. So far in the third quarter, both Comcast and Time Warner Cable have reported video subscriber losses, of course.
But that in itself would not be unusual, given a market share shift in favor of telcos and satellite providers of late. Comcast earlier reported a loss of 275,000 subscribers in the third quarter, while Time Warner Cable says it lost 155,000 video subscribers, representing a collective loss of 430,000 subscribers. Both Verizon and AT&T, on the other hand, gained 200,000 or more subscribers each.
In other words, telco gains roughly mirrored cable operator losses. Verizon’s FiOS TV service had an increase of 204,000 net new subscribers, while AT&T’s U-Verse had an increase of 236,000 new video subscribers. That represents a gain of 440,000 subscribers. In other words, cable losses basically represent market share shifts to telco and satellite providers.
In fact, DirecTV also reports it added 174,000 net new U.S video customers as well. Dish Network hasn’t reported, yet. DirecTV’s gains then might be said to represent a shift of share from other cable providers, and possibly some share from rival satellite provider Dish Network as well,
Furthermore, even if the multichannel video market should experience a second consecutive quarter of subscriber decline, it still might not necessarily mean that customers are substituting online video viewing for subscriptions. With the backdrop of the sluggish U.S. economy, most customers might be temporarily suspending service, planning to sign up again when conditions improve.
Still, that could lead to years of trouble, and could lead to a definitive shift to online video if the content providers decide to shift more support to online delivery.
Some 13 percent of current multichannel video subscribers in the United States say they are “somewhat” or “very” likely to cancel their current subscription in the next twelve months, and not sign up with a competing provider, according to a survey of 2,000 US households recently conducted by Strategy Analytics.
So far, it is hard to substantiate that magnitude of shift based on the third quarter results, which mostly confirm a continued market share shift away from cable and towards telco and satellite providers.