After seeing the first subscriber loses in the history of multichannel TV in the U.S. during the second and third quarters of 2010, operators managed to see growth of about 65,000 subscribers for the 4th quarter and a full year gain of 211,000 customers for cable, satellite and telco providers according to new research from SNL Kagan.
The full year growth in the multichannel subscribers is important because subscriber loses in the second and third quarters were widely reported as evidence that the growing popularity of over-the-top providers like Netflix was finally having a serious impact on the multichannel business.
Those reports were based on SNL Kagan data showing that telcos and satellite operators continue to gain ground against cable operators but that their gains were not enough to compensate for cable's loses, producing an overall decline in multichannel subscribers of 216,000 in the second quarter of 2010 and 119,000 in the third.
A number of researchers pointed out, however, that those declines had occurred in the context of the worst economic downturn since 1948 and that the loses were tiny-just 0.3% of the total multichannel universe during a six month period. At that rate, which works out to 0.6% a year, it would take five years for operators to see just a 3% decline and a half century of loses before the industry would lose about one third of its subs.
The new data would tend to confirm the importance of economic conditions in the subscriber counts. Operators reported that sub trends improved in the fourth quarter of 2010 as a result of slight housing sector and labor market improvements, along with reduced defection churn from over-the-air converts acquired during the digital transition in June 2009, SNL Kagan reported in a commentary on the results.
According to SNL Kagan's analysis, the multichannel universe grew to almost 100.1 million video subscriptions at the end of 2010, a 0.2% gain year-over-year. While a rebound in housing is good news for the industry, the U.S. Census Bureau reported an increase of occupied housing units at a faster clip than sub growth, which points to a decline in multichannel penetration, the research company noted.
The data also continued to show steep declines for cable operators, which had about 59.8 million subs, or 59.8% of all multichannel subscribers at the end of 2010, down from 64.6 million subs in the second quarter of 2008, when they had 66.2% of all subs.
Telcos meanwhile increased their share from 2.1% of all subs in the second quarter of 2008 to 6.9% at the end of 2010, when they had about 6.9 million subscribers. DBS subscribers also grew from nearly 31.0 million to 33.4 million over the same period.