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Cable Technology Feature Article

September 28, 2010

Weak Economy behind the Decline of U.S Pay-TV Subscribers

By Rajani Baburajan, TMCnet Contributor

In-Stat (News - Alert) reported that the number of pay-TV subscriber households in the United States has actually decreased for the first time.

The new In-Stat report titled “U.S. Pay-TV Subscribers Decline in 2Q10,” finds that U.S. pay-TV households, which consist of cable TV, IPTV (News - Alert), and satellite TV subscribers, saw a decline of approximately 167,000 subscribers during the second quarter of 2010.

According to Mike Paxton, principal analyst, there are several reasons behind the subscriber loss.

Paxton said, “While growing availability of over-the-top Internet video is spurring talk of mass 'cord-cutting,' this decline is not about canceling pay TV in favor of Internet video. The main driver of these subscriber declines is the struggling US economy and high unemployment.”

The “cord-cutting” trend adopted by U.S. pay TV subscribers was the highlight of the recent report from Strategy Analytics (News - Alert). The report from Strategy Analytics noted that pay TV subscribers in the country are dropping traditional paid television service in favor of free broadcast or Internet-delivered “Over the Top” content.

Now In-Stat is countering the arguments from Strategy Analytics by providing market data.

The report also includes a snapshot of the current (2Q) US pay-TV market by platform, new household formation and disposable income trends and a narrative forecast regarding the pay-TV subscriber growth beyond 2010.

Another related research from In-Stat, “2Q10 Pay-TV Subscribers Database,” provides actual subscriber numbers for the top 60 cable (analog and digital), top 75 satellite (DTH), and top 70 IPTV (or Telco TV) pay-TV operators worldwide, In-Stat officials said.

The research is a part of Pay-TV Subscriber Database, which tracks pay-TV subscribers segmented by operator type, operator, and country or region. It includes five-year forecasts, with quarterly updates.

The insights are derived from a deep understanding of technology impacts, according to In-Stat.

This trend may contradict the findings announced by ABI Research (News - Alert) in 2009, which estimated that global pay-TV subscribers will number more than 730 million by the end of 2011. The market data by ABI Research also predicted that North America will have the highest subscriber penetration.

Rajani Baburajan is a contributing editor for TMCnet. To read more of Rajani's articles, please visit her columnist page.

Edited by Erin Monda