Report: Pay-TV Subscriptions Poised for Comeback

15 Apr, 2014 By: Erik Gruenwedel

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High-speed Internet key to sub returns as multichannel operators leverage ISP prowess

The pay-TV ecosystem in the United States is set to grow subscribers by 0.14% in 2014, after declining 0.58% in 2013, according to new data from Strategy Analytics.

A key driver to the turnaround is high-speed Internet service offered by cable, satellite and telecom operators, which grew 17.5% in 2013, and is projected to grow 8.3% annually through 2019.

With the growth of digital distribution of home entertainment, including subscription streaming, pay-TV operators have seen increased demand for broadband Internet service offset declining bundled video subs.

“The digital transition has been a double-edged sword for the cable industry: Average revenues have risen, but higher prices have squeezed out some customers,” Eric Smith, analyst in the digital consumer practice, said in a statement. “We expect to see these customers return to pay-TV gradually, albeit with different packages or different services than those they left, and IPTV services in particular stand to gain the most.”

Comcast in the fourth quarter reversed a long-standing trend of video subscriber losses, following the company’s rollout of its Xfinity X1 platform. In addition to its own Streampix SVOD service, the digital movie store launched this past November by the No. 1 cabler.

Consolidation among domestic cable operators should enable faster digital transitions and a wider deployment of technology platforms, according to Strategy Analytics. This trend will give subscribers better opportunities to access and consume content on multiple devices in the home and on the go.

“Comcast has become a technology leader with its Xfinity X1 and X2 platforms,” Jason Blackwell, director of the SPS service, said in a statement. “This is driving a global trend where operators with advanced gateways and services have seen subscriber growth, better customer retention, and higher average revenues per user.”

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