• by Wayne Friedman , March 15, 2011

Cable operators, satellite and telco video services seem to have reversed the trend of losing video subscribers in the middle of 2010 -- partly due to the continuation of the slowly improving housing market.

SNL Kagan says the industry gained 65,000 during the fourth quarter of 2010, after incurring losses in the third quarter and second quarter. Overall, Kagan says there was a full-year increase of 211,000 when looking at all cable systems, satellite programming services and telco video services.

Such gains are pitted against a multichannel universe, which is now comprised of almost 100.1 million video subscriptions -- a 0.2% year-over-year gain. Kagan says these results lag behind improvement in the housing/real estate industry, which is a strong predictor of growth for the multichannel TV retailing industry.

Looking at specific businesses, cable lost 526,000 subscribers in the fourth quarter -- now at 59.8 million U.S. subscribers, commanding a 59.8% market share. Direct satellite services added 133,000 in the period to 33.4 million, now at a 33.3% market share. Telco video services added the most business -- 458,000 customers -- now totaling 6.9 million, and getting to a 6.9% market share.

In the second and third quarters of this year, the multichannel business lost 216,000 and 119,000, respectively. Cable lost 711,000 and 741,000 during the second and third quarter, respectively.

Looking forward, SNL Kagan says despite the "inconclusive trend lines between sub adds and sub penetration rates, the fourth-quarter gains do reinforce the importance of multichannel video."

More stable economic conditions are expected to bring back better gains for the business. But SNL Kagan warns that more alternative screens/services are vying for consumers' attention -- which means that more "video penetration rates decline over the long-term."