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Multichannel Operators Grow Subs in 2010

15 Mar, 2011 By: Erik Gruenwedel

Upticks in video subscribers among telco and satellite operators contributed to an overall increase in the multichannel market, despite downturns in the number of cable video subs opting for pay-TV channels and transactional video-on-demand, a new report said.

Charlottesville, Va.-based SNL Kagan said the multichannel market grew to almost 100.1 million video subscriptions in 2010, a 0.2% gain over 2009. As documented in financial reports from Comcast and Time Warner Cable, among others, cable video subs declined 2.25 million in 2010, offset by 696,000 new satellite subs and 1.8 million new telco members.

The relative impact of the fourth quarter return to subscriber growth was actually tempered by improvements in occupied housing. While a rebound in housing is good news for the industry, Kagan said the U.S. Census Bureau reported an increase of occupied housing units at a faster clip than sub growth, which points to an actual decline in multichannel penetration of total and occupied housing units during the quarter.

“Despite the inconclusive trend lines between sub adds and sub penetration rates, the fourth-quarter gains do reinforce the importance of multichannel video, and we project more stable macroeconomic conditions will guide the way for absolute video sub adds, if not gains in penetration,” the report reads. “However, the greater underlying issue remains more screens, and alternative platforms [are] competing for users’ attention than ever before. The changing content landscape impacts the potential pool of video subs negatively so we expect intra-multichannel competition to escalate while video penetration rates decline over the long term.”

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