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NPD Under Fire From Pay-TV Channels Over Cord-Cutting Claim

22 Jan, 2014 By: Erik Gruenwedel

Industry increasingly nervous about cord-cutting claims as subscription streaming grows

The NPD Group has elicited criticism from HBO, Showtime Networks and others for a Jan. 20 report claiming household subscriptions to premium TV channels declined 6% in 2013. The report, which also stated that more U.S. consumers (4%) gravitated toward subscription streaming services such as Netflix, has not been challenged.

Indeed, HBO, which is owned by Time Warner and claims a global subscriber base of more than 120 million, issued a statement calling the NPD report wrong. The premium channel added 1.9 million subscribers in 2012 — a tally it expects to replicate in 2013.

“The research is simply incorrect. Both HBO and Cinemax services have shown significant domestic subscriber growth the past two years," HBO said.

A Showtime representative told the Los Angeles Times the premium channel has grown subscribers by 1 million six out of the last seven years.

“Showtime and every other premium network have increased both subscribers and penetrations over the last two years,” the spokesperson said, adding that the NPD study “does not accurately reflect actual subscriber counts.”

Starz LLC claims to have upped subscribers by 1.2 million over the past year.

NPD Jan. 22 issued a statement saying the Jan. 20 press release should not have called out declines in subscribers for specific premium TV channels such as HBO and Showtime. However, the data used for the release pertained to aggregate results for all premium TV channels and does suggest that the overall number of pay-TV subscribers has declined, based on a representative sample of the U.S. population.

NPD said that upon further examination of the data, there is evidence supporting the conclusion that individual pay-TV subscribers are either subscribing to more channels, or adding channels over time.

"In that case, faithful premium channel subscribers are becoming more so, which would be consistent with the subscription increases being reported by individual channels," the NPD wrote.



About the Author: Erik Gruenwedel

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