Subscribers continuing to cut the television cord, report says

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Posted: Saturday, September 7, 2013 12:00 am

Cord-cutting continues to nibble away at the U.S. pay-TV industry.

According to an SNL Kagan report released this week, the industry suffered a net loss of 217,000 subscribers in the second quarter of this year compared with the same period last year.

The report also showed that traditional cable companies — including Time Warner Cable — are losing more subscribers to satellite and telecommunications competitors that also offer video service. The report illustrated why Time Warner Cable had little choice but to settle its contentious dispute with CBS Corp., which led to a monthlong blackout of CBS-owned stations in Los Angeles, New York and Dallas.

The SNL Kagan report primarily highlighted comparisons from the first quarter of this year to the second quarter. That comparison showed that the cable, satellite and telecommunications video service companies collectively lost 366,000 TV subscribers from one quarter to the next.

Still, the losses represented an 11 percent improvement from the same measurement period in 2012, when the number of subscriber losses reached 411,000.

Cable companies experienced the greatest declines — a drop of about 607,000 subscribers —- which was more than double the drop from the previous period. (The second and third quarters are softer quarters for the industry because the weather is warmer and people find other activities.)

Still, SNL Kagan noted that the 607,000 figure represented “a slight improvement” from 2012, when losses were greater. Cable’s share of the combined customer base for the pay-TV industry slipped to 55.3 percent.

Losses by Time Warner Cable because of the CBS dispute were not included in the count because the CBS blackout fell during the third quarter.

Verizon and AT&T continued to take video share from cable and satellite providers, picking up more than 400,000 net additions from one quarter to the next. SNL Kagan places the subscriber count for the two at nearly 11 million video customers.

The two satellite providers — DirecTV and Dish Network — are finding it difficult to capture more than a third of the U.S. pay-TV market. The two companies combined experienced a drop of 162,000 subscribers from one quarter to the next, SNL Kagan estimated. Combined customer rolls for the two satellite TV giants remains just under 34 million customers.

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