Analysis for 'SNL Kagan'

  • Research: Shift in Ad Spending From TV to OTT Expected Over Next 2 Years

    New research from SpotX reveals an expected shift in advertising spending from TV to OTT over the next 2 years. The research was conducted by Kagan among 41 U.S. pay-TV operators, OTT providers, content owner and advertisers. Just 11% of advertisers reported spending 21%-40% of their budgets on OTT today, but that’s expected to rise to 67% doing so in 2 years. Meanwhile, 33% said they currently spend 21%-40% on TV, but that’s expected to drop to 22% in the same time frame.

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  • SNL Kagan Forecasting 10% of U.S. Homes Will Cut the Cord by 2015

    Researcher SNL Kagan is forecasting that 10% U.S. homes (12.1 million) will cut the cord on their pay-TV subscriptions by the end of 2015, substituting in over-the-top alternatives. At the end of 2011, 4% or 4.5 million homes will have done so. Still, Kagan sees pay-TV subscriptions actually increasing, though not at a rate fast enough to maintain current penetration levels (see yearly forecast after the break).

    Kagan isn't providing any additional profile information on these cord-cutters, but as I've said before, I think the most vulnerable buckets are the "cord-nevers" (i.e. college grads and others who simply don't sign up for pay-TV service in the first place) and entertainment-only viewers who don't care about live sports that are only available on cable TV channels.

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  • ESPN Continues Dampening Cord-Cutting Fears

    ESPN released the its latest round of research on cord-cutting this week, finding that a tiny .18% of American homes with both pay-TV service and a broadband connection dropped their video service between the fourth quarter of 2010 and the first quarter of 2011. ESPN said the .18% is actually lower than the .28% it found in its prior period research and is fully offset by a comparable number of people who upgraded from a "broadcast-only" service level to a full pay-TV package. Not surprisingly, ESPN said that among medium-to-heavy sports viewers there was zero cord-cutting.

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  • ESPN Wades Into Cord-Cutting Research Fray With New Data

    Not content to sit by and watch the headlines claiming significant cord-cutting is underway, ESPN is wading into the cord-cutting research fray, releasing a new analysis of its own, which it asserts that the activity has been totally overblown.

    By analyzing Nielsen data, ESPN says that in the past 3 months, .28 percent of U.S. households have cut the cord, though mitigating this decrease is that .17 percent of households that had been subscribing to the lowest tier of pay-TV service (dubbed "broadcast-only") upgraded to pay-TV and broadband Internet services. With approximately 110 million households in the U.S., ESPN is saying around 308,000 homes cut the cord, with 187,000 upgrading from broadcast-only, for a net loss due to cord-cutting of 121,000 households. Interestingly, that 121,000 households is quite close to the 119,000 subscribers that SNL Kagan said that U.S. pay-TV operators lost in Q3 '10.

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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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  • Pay-TV Industry Loses Subscribers in Q2 '10 For First Time Ever; Cable Bears Brunt

    Research firm SNL Kagan is reporting today that the U.S. pay-TV industry (cable/satellite/telco) lost 216,000 multichannel TV subscribers in Q2 '10, the first time the industry as a whole has lost subscribers. Cable operators bore the brunt of the losses, dropping 711,000 subscribers, with Kagan saying 6 of the 8 operators reporting suffered record quarterly losses. By contrast, telcos added 414,000 subs in the quarter and satellite providers gained 81,000. The losses leave cable's industry share at 61%, down from 63.6% a year ago.



    Kagan analyst Mariam Rondeli ascribed the quarterly losses to low housing formation and high unemployment due to the ongoing recession, coupled with churn due to promotions from last year's broadcast digital transitions expiring. Rondeli pointed out that over-the-top video alternatives were not the cause. By comparison, the pay-TV gained 378,000 subscribers in Q2 '09, meaning there was a swing of 594,000 subscribers year-over-year. U.S. Pay-TV providers as a whole ended Q2 '10 with 100.1 million subscribers.

    Looking ahead, I've heard some murmurs that Q3 '10 could be softer than in prior years, again partially due to the recession, but also because seasonal college students' subscriptions  may be reduced due to over-the-top alternatives. While we've yet to see any tangible evidence of cord-cutting, the first impact may simply be slower multichannel sign-ups from younger users more accustomed to watching online. We'll see.

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