Analysis for 'Telcos'

  • Research: Pay-TV’s High Prices Continue Alienating Subscribers

    Cord-cutting is accelerating, and there’s a simple, unsurprising reason why: pay-TV service is just too expensive. For the fifth quarter in a row, that’s the finding of TiVo’s Online Video & Pay-TV Trends Report. In Q4 ’17, in response to the question “What factors influenced you to cancel your cable/satellite service?” the price/too expensive answer grew by 6.6 percentage points vs. Q4 ’16 to 86.7%, its highest level ever.

    Price/too expensive is by far the most important reason, with the second reason, “I use an Internet streaming service” at 39.7%, actually down 8.6 percentage points vs. Q4 ’16. Next was “I use an antenna to get the basic channels on my TV, at 23%, down 4.2 percentage points vs. Q4 ’16.

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  • Cord-Cutting Accelerates, Top Pay-TV Operators Lost Nearly 1.5 Million Subscribers in 2017

    The top 13 pay-TV operators in the U.S., which represent around 95% of the total market, lost nearly 1.5 million subscribers in 2017, double 2016’s loss of 760K subscribers, according to Leichtman Research Group. However, the loss would balloon to nearly 3.1 million subscribers after deducting the 1.6 million skinny bundle or “vMVPD” subscribers that were added in 2017. The 3.1 million multichannel subscriber loss is about 62% higher than the 1.9 million lost in 2016. The top 13 pay-TV operators ended 2017 with approximately 92.2 million subscribers.

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  • Research: Pay-TV Satisfaction is Up, But Price Remains Achilles Heel

    TiVo has released its Q2 ’17 Video Trends Report, finding among other things that satisfaction with the value of pay-TV among subscribers noticeably increased over the prior quarter even as price remains a major concern, and a driver of cord-cutting.

    TiVo found that 31.2% of subscribers said they’re “very satisfied” with the value of their pay-TV service, up 7.5 percentage points vs. Q1 ’17 and 11.6 percentage points over the past 2 years. Another 52.9% of subscribers said they’re “satisfied,” roughly flat with Q1 ’17. Respondents saying they’re “unsatisfied” dropped 6.9 percentage points vs. the prior quarter to 15.9%.

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  • Cord-Cutting Accelerates in Q1 '15 as Pay-TV Operators Lose 31K Subscribers

    U.S. pay-TV operators lost 31K video subscribers in Q1 '15, compared to a gain of 271K in Q1 '14, according to analysts MoffettNathanson. The loss was the first time the industry has ever lost subscribers in a first quarter, and signals an acceleration of cord-cutting (or cord-nevering, since it's hard to pull the two apart), contributing to a .5% industry contraction over the past 4 quarters (461K subscribers).

    MoffettNathanson has always tried to put pay-TV results in context with both occupied housing net additions and new household net additions. In Q1, the former declined by 407K, but the latter increased by 1.3 million, suggesting around 900K households were added in the U.S. Despite the gain the industry still lost subscribers.

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  • Cord-Cutting Remains Negligible As U.S. Pay-TV Operators Lost Just 125K Subscribers In 2014

    Despite all the talk of massive cord-cutting being just around the corner, evidence continues to demonstrate that the U.S. pay-TV business remains relatively healthy. The latest, from Leichtman Research Group, shows that the 13 largest U.S. pay-TV operators, which together account for 95% of the market, lost just 125K subscribers in 2014. That was basically even with the 95K they lost in 2013 (see chart below).

    LRG president and principal analyst Bruce Leichtman noted that the 220K subscribers lost over the past 2 years represents just about .2% of the operators' total subscriber base. Of course no business ever wants to lose customers, but given the dramatic rise in OTT usage and subscriber levels, along with the vast array of viewing options, losing just .2% over 2 years seems like a pretty good level of stability (consider that Netflix alone added 5.7 million U.S. subscribers in '14).

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  • Survey: Consumers' Cord-Cutting Intentions Remain Muted

    Interest in cord-cutting remains relatively muted according to new data from Frank N. Magid Associates. The firm, which has been surveying consumers' attitudes towards cord-cutting each of the past 4 years, found 2.9% of respondents agreeing they're "very likely" to cancel their pay-TV service in the year ahead, a slight uptick from 2.7% found in 2013, 2.2% in 2012 and 1.9% in 2011.

    Magid noted that the "very likely" level jumped to 4.9% for 25-34 year-olds, but dropped to 1.4% for those identifying themselves as ESPN viewers (live sports are widely believed to be the most formidable bulwark against cord-cutting).

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  • VideoNuze Podcast #229: Cord-Cutters are Satisfied; TV Everywhere Lags

    I'm pleased to present the 229th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    Earlier this week Colin's firm nScreenMedia released new research, finding among things, that cord-cutters are mostly satisfied without pay-TV service. Colin provides his take on the data, noting in particular that just 9% of respondents missed sports, which suggests cord-cutters are mostly self-selected non-sports fans.

    We also zero in on millennial cord-cutters and their attitudes. Both of us believe the data counters a quote from Time Warner CEO Jeff Bewkes this week related to millennials, that "Once they take the mattress and get it off the floor, that's when they subscribe to TV." That's been true in the past, but it will get a lot harder given the range of video choices now available.

    We then turn our attention to TV Everywhere and recent research showing that while it is valued by those who use it, adoption still remains relatively low. We dig into why this conundrum is likely to continue.



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  • Research: Cord-Cutters Mostly Satisfied Without Pay-TV Service

    New research from nScreenMedia (my weekly podcast partner Colin Dixon's firm), has found that among pay-TV cord-cutters, 37% said they were "extremely happy and will never go back to pay-TV," with another 47% saying they're "pretty happy with the decision." Conversely, 8% said they were "pretty unhappy with the decision" and 9% "hate it and wish they had the service again."

    The overwhelming lack of remorse suggests cord-cutters have been able to cobble together mostly adequate OTT substitutes to pay-TV.

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  • U.S. Broadband ISPs Add 1.2 Million Subscribers in Q1 '14, Most in 2 Years

    The top 17 U.S. broadband ISPs added nearly 1.2 million subscribers in Q1 '14, notching the best quarter of growth since Q1 '12 (see chart below). These ISPs now have 85.5 million subscribers, with top cable operators accounting for nearly 59% or 50.3 million and top telcos accounting for 41% or 35.2 million. The data is according to Leichtman Research Group.

    The top cable operator ISPs garnered 83% of the quarter's 1.2 million subscriber additions, vs. just 17% for the telcos. This compares with Q1 '13, when the top cable operator ISPs took 72% of net additions, with telcos taking 28%. LRG notes that Q1 subscriber additions historically account for more than Q2 and Q3 additions combined.

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  • Top U.S. Broadband ISPs Add Another 2.6 Million Subscribers in 2013

    The 17 largest broadband ISPs in the U.S. added over 2.6 million subscribers in 2013, down almost 105K vs. the approximately 2.7 million subscribers they added in 2012. These ISPs now have 84.3 million subscribers, with cable TV operator ISPs having 49.3 million (58%) and telco ISPs having 35 million (42%). The data comes from Leichtman Research Group.

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  • U.S. Pay-TV Industry Loses 105K Subscribers in 2013, First-Ever Loss

    The U.S. pay-TV industry lost 105K video subscribers in 2013, the first time in history that the industry has contracted on a year-over-year basis. The industry ended 2013 with approximately 94.6 million subscribers vs. 94.7 subscribers at YE 2012. The 105K loss is a swing of 280K vs. the 175K the industry gained in 2012. (see chart below)

    The data comes from Leichtman Research Group, which has tracked the top pay-TV operators' video subscriber numbers for years.

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  • Survey: 48% Of Pay-TV Subscribers “Cord Cheat” with OTT Services

    Digitalsmiths has released its quarterly survey on consumer behavior around pay-TV and VOD, finding that consumers are continuing to “cord cheat,” with 48% supplementing their pay-TV subscriptions with OTT services, up from 35% reported in Q2 '13. Most popular for these consumers was Netflix (42%), while for individual movie rentals Redbox kiosks took the lead at 17%.

    Digitalsmiths believes cord cheating is a big threat to pay-TV providers and said they must adapt and better support consumer expectations. According to the survey, the top reasons consumers are choosing OTT services like Netflix, Hulu or iTunes are because they are more convenient (53%), cheaper (48%) and allow full season TV viewing (31%).

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  • Study: U.S. Broadband Homes Without Pay-TV are Basically Flat at 9%

    There is a lot of talk these days about pay-TV cord-cutters and cord-nevers and how OTT providers can leverage this group to build their businesses. But a data point from research firm Leichtman Research Group last week that caught my eye suggests this market may be smaller than many people think and also not growing very fast. LRG noted that just 9% of U.S. homes subscribe to a broadband Internet service, but not a pay-TV service, up just slightly from the 8% level in both 2011 and 2012 (see graph below).

    Further, Bruce Leichtman of LRG told me that of the broadband/no pay-TV group, just 37% get their broadband from speedier and pricier cable or telco fiber deployments. That compares with 75% taking these services among other broadband subscribers (remember than cable and telco fiber are by far the most prevalent broadband services).

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  • Tipping Point? Q1 '13 Broadband Subscriber Growth Was 6x Bigger Than Pay-TV's

    New industry data compiled by Leichtman Research Group shows that broadband ISPs that account for 93% of the U.S.  market added over 1.1 million subscribers in Q1 '13, nearly 6 times the 194K pay-TV subscribers that were added in the period by pay-TV operators that account for 94% of the market.

    Broadband subscriber additions have outstripped pay-TV's for years, but the 6x ratio is more than double the average of 2.8x from the prior 2 years. The 194K pay-TV additions in Q1 were down 56% vs. the 445K added in Q1 '12, while the 1.1M broadband additions were off 15% from the 1.3M in each of the prior 2 years.

    On the surface the data suggests that cord-cutting - a shift from viewing video via pay-TV to via broadband - may finally be taking hold. But while LRG's Bruce Leichtman has indeed found an uptick in his calculations of cord-cutting (up from .2% of U.S. homes to .4%-.5%), he sees a far more nuanced picture of what accounted for Q1's swing, plus lots of uncertainty going forward.

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  • Study: Cord-Cutters and Cord-Nevers Will Soar to 17.2 Million U.S. Homes by 2017

    New research from The Diffusion Group forecasts that the number of "pay-TV refugees" - U.S. homes subscribing to broadband, but not to pay-TV services - will increase 58%, from 10.9 million in 2012 to 17.2 million in 2017. Pay-TV refugees consist of both "cord-cutters" (homes that once subscribed to pay-TV, but no longer do) and "cord-nevers" (homes that have never subscribed to pay-TV). The percentage of broadband subscribers who are pay-TV refugees will increase from 12.5% in 2012 to 17.2% in 2017.

    Although it forecasts the number of cord-cutters to increase over the next 5 years, TDG's founding partner and director of research Michael Greeson believes the pay-TV industry's main concern should be with cord-nevers which will more than double during that period. Of the 17.2 million pay-TV refugees in 2017, TDG forecasts 40% or 6.9 million of them to be cord-nevers, up from 29%, or 3.2 million, in 2012.

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  • 5 Items of Interest for the Week of Dec. 5th

    Once again I'm pleased to offer VideoNuze's end-of-week feature highlighting and discussing 5-6 interesting online/mobile video industry news items that we weren't able to cover this week. Read them now or take them with you this weekend!

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  • 5 Items of Interest for the Week of Nov. 29th

    Following the Thanksgiving break last Friday, VideoNuze's end-of-week feature of curating 5-6 interesting online/mobile video industry news items that we weren't able to cover this week, is back. Read them now or take them with you this weekend!

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  • How About Some Actual Data in the Cord-Cutting Debate?

    No sooner did SNL Kagan's press release, announcing that the U.S. pay-TV industry had lost 119K subscribers in Q3 '10, following a loss of 216K subscribers in Q2, hit the wire today, than the blogosphere was alight with a fresh round of posts that cord-cutting was to blame. This chorus was surely egged on by Kagan senior analyst Ian Olgeirson's remark in the press release that "it is becoming increasingly difficult to dismiss the impact of over-the-top substitution on video subscriber performance." That remark was a notable change of tone from Kagan's Q2 release which ascribed subscriber losses solely to the country's ongoing economic woes.

    Note however that Olgeirson only offered his opinion, rather than any actual, hard data from Kagan about cord-cutting's impact. That is characteristic of both sides of the current cord-cutting debate - lots of opining, but little-to-no reliable data. In my own Q3 analysis - in which I suggested that the pay-TV as a whole likely lost around 97K subscribers in Q3 (though the group of 8 of the top 9 pay-TV operators actually gained subscribers) - I noted that nobody truly knows the impact of cord-cutting, yet anyway.

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  • 6 Items of Interest for the Week of Oct. 18th

    It was another busy week for online/mobile video, and so VideoNuze is continuing its Friday practice of curating 5-6 interesting industry news items that we weren't able to cover this week. Read them now or take them with you this weekend!

    Networks block Google TV to protect themselves
    Yesterday news started breaking that ABC, CBS and NBC are blocking access by Google TV. There are numerous concerns being cited - potential disruption of advertising, encouraging cord-cutting, incenting piracy, diminished branding, unsatisfactory ad splits with Google, and general worry about Google invading the living room. Each item on its own is probably not enough to motivate the blocking action, but taken together they are. Still, doesn't it feel a little foolish that broadcasters would differentiate between a computer screen and a TV screen like this? For Google, it's more evidence that nothing comes easy when trying to work with Hollywood. I'm trying to find out more about what's happening behind the scenes.

    TWC Lines Up For ESPN Online Kick
    An important milestone for TV Everywhere may come as early as next Monday, as #2 cable operator Time Warner is planning to make ESPN viewing available online to paying subscribers. Remote access is part of the recent and larger retransmission consent deal between Disney and TWC. TV Everywhere initiatives have been slow to roll out, amid cable programmers' reluctance.  Further proving that remote authenticated access works and that it's attractive with a big name like ESPN would increase TV Everywhere's momentum.

    Hulu Plus, Take Two: How's $4.95 a Month?
    Rumors are swirling that Hulu may cut the price of its nascent Hulu Plus subscription service in half, to $4.95/mo. That would be a tacit recognition of Hulu Plus's minimal value proposition, largely due to its skimpy content offering. As I initially reported in August, over 88% of Hulu Plus content is available for free on Hulu.com. More important, Netflix's streaming gains have really marginalized Hulu Plus. Netflix's far greater resources and subscriber base have enabled it to spend far bigger on content acquisition. Even at $4.95, I continue to see Hulu Plus as an underwhelming proposition in an increasingly noisy landscape.

    Viacom Hires Superstar Lawyer to Handle YouTube Appeal
    Viacom is showing no signs of giving up on its years-long copyright infringement litigation against Google and YouTube. This week the company retained Theodore Olson, a high-profile appellate and Supreme Court specialist to handle its appeal. While most of the world has moved on and is trying to figure out how to benefit from YouTube's massive scale, Viacom charges on in court.

    Verizon to sell Galaxy Tab starting November 11th for $599.99
    Verizon is determined to play its part in the tablet computer craze, this week announcing with Samsung that it will sell the latter's new "Tab" tablet for $600 beginning on November 11th. The move follows last week's announcement by Verizon that it will begin selling the iPad on Oct. 28th, which was widely interpreted as the first step toward Verizon offering the iPhone early next year. Apple currently owns the tablet market, and it remains to be seen whether newcomers like the Tab can break through. For his part, Apple CEO Steve Jobs said on Apple's earnings call this week that all other tablets are "dead on arrival." Note, if you want to see the "Tab" and learn more about how connected and mobile devices are transforming the video landscape, come to the VideoSchmooze breakfast at the Samsung Experience on Wed., Dec. 1st.

    One-Third of US Adults Skip Live TV: Report
    A fascinating new study from Say Media (the entity formed from the recent merger of VideoEgg and Six Apart), suggesting that 56 million, or one-third of adult Internet users, have reduced their live TV viewership. The research identified 2 categories: "Opt Outs" (22 million) who don't own a TV or haven't watched TV in the last week and stream more than 4 hours/week, and "On Demanders" (34 million) who also stream more than 4 hours/week and report watching less live TV than they did a year ago. Not surprisingly, relative to Internet users as a whole, both Opt Outs and On Demanders skew younger and higher educated, though only the latter had higher income than the average Internet user. This type of research is important because the size of both the ad-supported and paid markets for live, first-run TV is far larger than catalog viewing. To the extent its appeal is diminishing as this study suggests poses big problems for everyone in the video ecosystem.


     
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  • Are Pay-TV Providers Getting Hit By a Perfect Storm in Q3?

    The U.S. pay-TV industry, which as a whole lost multichannel video subscribers for the first time in Q2 '10, may be heading for a soft 3rd quarter as well. As Multichannel News reported yesterday, Time Warner Cable's CFO Rob Marcus said at a conference this week that Q3 "video net losses are pacing ahead" of where they were in Q3 '09. He attributed the downturn to recession-related factors of high unemployment, high home vacancy rates and slow new home formation. Though that's a fair explanation, it's only one element in a perfect storm pay-TV operators now find themselves battling.

    Aside from the above recession-related matters, pay-TV operators are also up against belt-tightening that's rooted in basic household economics. As Craig Moffett at Sanford Bernstein pointed out in a note last weekend, in the past 25 years, cable and satellite spending has increased from 1/2 of 1% of discretionary spending to 1.4%, a growth rate that's triple other household discretionary line items.

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