U.S. Multichannel Market Shows Decline

MONTEREY: High unemployment and a weak housing market are among the reasons cited by SNL Kagan for the poor second-quarter performance of the U.S. multichannel industry, which lost 216,000 customers in the period, as compared with the year-ago gain of 378,000.

The overall sub base for cable, DTH and IPTV platforms fell to 100.1 million in Q2, with the biggest erosion coming from cable—a 711,000 fall in customers. DTH and telcos added 81,000 and 414,000 subscribers, respectively. Nonetheless, cable MSOs still dominate with a 61 percent share (down from 63.6 percent in second quarter 2009). The telcos have upped their share from 4.3 percent to 6 percent.

“Although it is tempting to point to over-the-top video as a potential culprit, we believe economic factors such as low housing formation and a high unemployment rate contributed to subscriber declines in the second quarter,” said SNL Kagan analyst Mariam Rondeli. “We are also seeing churn resulting from the broadcast digital transition, which boosted video uptake early last year, as many have abandoned their paid subscriptions once initial promotional contracts expired.”