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Monday, November 10, 2014

Report: Pay TV Exodus Continuing

The pay TV exodus is continuing slowly but surely. Suddenly, according to USA Today, traditional content companies are making moves to accommodate them.

What has caught the attention of traditional media companies is the rising number of U.S. broadband Internet-served homes without pay-TV service. Some of these are "pay-TV refugees," as research firm The Diffusion Group has dubbed them, customers who have dropped their service and gone strictly to the Net for video.

The exodus was evidenced in recent earnings reports from pay-TV providers. Cable companies Comcast and Time Warner Cable in recent weeks said that they had lost 81,000 and 184,000 pay TV subscribers, respectively, during the third quarter. Satellite TV providers DirecTV and Dish last week said they lost 28,000 and 12,000.

Telecom TV providers fared better, with Verizon FiOS adding 114,000 new video customers and AT&T gaining 216,000 U-verse TV subscribers.

Lucky for pay-TV services that, in general, the average customer bills continued to rise to help offset any declines and churn. The average DirecTV customer, for instance, pays $107 monthly.

But pay-TV companies that also provide broadband connectivity have another highlight: more customers are adding -- and switching to --broadband. Comcast added 315,000 broadband customers; TWC, 108,000 during the third quarter.


About 14% of adult broadband users do not use a legacy pay-TV service, up from 9% in 2011, The Diffusion Group has found. Over the next few months, the number of broadband homes is expected to surpass the number of pay-TV homes for the first time, it expects.

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