IHS: U.S. Pay-TV Cord-Cutting Fears ‘Validated’

SANTA CLARA: Pay-TV companies in the U.S. posted their worst-ever quarterly video subscriber losses in Q2, which IHS says validates industry cord-cutting fears.

The second quarter of 2015 marked the first time non-cable pay-TV operators lost video subscribers since satellite operators entered the pay-TV business in the early 1990s. IPTV operators posted minimal positive subscriber growth of less than 1 percent. Satellite operators and cable company subscriptions, however, declined less than 1 percent year on year. “Until the fourth quarter of 2014, IPTV had been the only pay-TV category to experience growth; however, by Q2 of this year, IPTV’s significant forward momentum had been lost,” said Erik Brannon, principal analyst of television media for IHS Technology.

Cable operators showed a slight improvement in Q2 over Q2 2014, as the effective bundling of faster-than-IPTV broadband and video gave cable TV companies a small local advantage over IPTV. “In much the same way that cable companies had to make room for satellite and IPTV operators, the maturity of IPTV is a signal that U.S. pay-TV companies must now strike a balance with over-the-top TV offerings,” Brannon said.

In all, U.S. pay-TV companies shed 658,450 subscribers in Q2.