Fewer Paid Subscribers For TV: Long-Term Worry Or Just A Hiccup?
The market for paid television -- basic cable, satellite and teleco packages -- has stopped growing for the moment. Should we be concerned?
Admittedly, the decline is slight -- just 0.2% in the second quarter 2010 versus the same period in 2009. That comes to losing 216,000 customers, for a current total of 100.1 million, according to SNL Kagan. Still, it's the first time in history this market has declined, according to the media researcher.
On the surface, quick-reacting TV analysts may say that free video on the Internet could be the reason for the decline. But looking deeper, it's really about the still-suffering economy -- as well as the movement to digital for those still-analog TV homes. Those viewers apparently took advantage of initial cable/satellite promotional packages and then failed to renew their subscriptions.
It has been no secret that cable operators have been losing existing standard basic cable customers but have been gaining in digital cable customers. Overall cable is losing share, down to 61% from around 63%.
Telecos' video programming services, on the other hand, have been growing the most -- around 6% in share so far from just over 4%. Satellite operators have been growing less so -- around 1% year over year.
All this says a lot about the economy as whole -- about new home sales, about those big shifts in how we get our video into the home. There is video saturation via older technologies.
Cable companies have done a great job in expanding into other digital platforms beyond video -- into broadband, home phone, and mobile.
What makes this dramatic is that multichannel programming services have been the bellwether metric for all of our seemingly ever-expanding needs/wants for entertainment and media. Even with the rise of the Internet over the last 15 years, multichannel programming services have grown -- even during the previous recession.
Perhaps this is a little glitch in the whole process. Then again, there are all these new over-the-air digital TV providers that are looking to take away even more business from traditional pay TV monthly sellers -- with packages as low as $15 a month.
If there is an ominous future for traditional ways of getting video, it comes from looking at the next wave of TV viewers -- those under 24. Research shows that under 40% of those viewers watch TV in prime time, and that number is dropping.
OK. Maybe we should be concerned.