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Cable Technology Feature Article

May 08, 2009

Quarterly Reports Show No Evidence of Video Cord Cutting

By Gary Kim, Contributing Editor

Enough first-quarter financial reports now are in to draw some conclusions about the state of the multichannel video entertainment business. Clearly, despite fears of "video cord cutting," nothing of that sort is happening on a detectable level.
Though Dish Network has not yet reported, results from three of the most-important challengers to cable operators show relatively robust gains. 
DirecTV reported a four-year-high net addition of 460,000 subscribers in the first quarter, up 67 percent year over year. AT&T added a net 284,000 video customers while Verizon Communications added a net 299,000 new FiOS (News - Alert) TV customers.
One has to look at market share gains and losses, though. And there the picture shows a general trend of cable operator losses, but not at a level that would explain the telco and DirecTV (News - Alert) gains.
Comcast lost about 78,000 video customers while Time Warner (News - Alert) Cable added 36,000 net new video customers. Cablevision Systems Corp. lost a net 6,300 video customers in the first quarter.
Those numbers suggest either that the multichannel video entertainment business still is growing, that some other contestants beyond the likes of Comcast and Cablevision are losing customers to DirecTV, AT&T (News - Alert) and Verizon, or both.
Anecdotes aside, it does not appear that end users are abandoning their linear video subscriptions in favor of online video. That might not always be the case, but for the moment, the numbers tell the story. Overall, the multichannel video business is experiencing some net growth and continuing shifts of market share.
For cable operators, video now is the equivalent of telephone company voice lines: a maturing product category that also is losing share to newer contestants.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Stefania Viscusi