Technology

SUS multi-channel video subscriber universe sees small growth in 2012: SNL Kagan

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MUMBAI: US multichannel subscribers grew slightly in both Q4 2012 and for the full year, reversing the negative quarterly trends of the earlier two quarters. The small gain that brought total multichannel subs to 100.4 million illustrates the continued popularity of multichannel video alongside evidence that alternative access is siphoning the segment‘s growth potential, according to SNL Kagan.

Multichannel service providers in the US collectively added 51,000 new customers in fourth quarter 2012, according to company reports, private MSO surveys and SNL Kagan estimates for total subscribers served by cable, satellite and telco video packages. The gains for the full year hinged on fourth-quarter performance following declines in the seasonally weak second and third quarters that essentially erased the 2012 first-quarter bump.

The three platforms collectively added 46,000 video customers year over year in 2012, finishing the year with more than 100.4 million. While the industry has never posted a full-year decline in video subscribers, growth has proven difficult above the 100 million-household mark. For the year, SNL Kagan estimates that U.S. cable subs declined to 56.4 million, DBS subs grew to 34.1 million and telco video subs grew to 9.9 million.

External factors continue to hold a place in the discussion, including persistent high unemployment and other macroeconomic weights along with widespread disruption to East Coast systems from Hurricane Sandy.

However, the modest fourth-quarter and full-year 2012 subscriber growth suggests the segment is not rebounding with the broader economy, and customer formation is lagging the rebounding housing market. According to the fourth-quarter 2012 figures from the US Census Bureau housing survey, occupied housing continued to ramp up, adding nearly half a million new units when including occupied, seasonal and occasional-use households.

The year-over-year comparison, which benefits from a standard backward revision in the survey, offers a broader perspective that supports the same trend line. The metric points to an annual net gain of 974,000 occupied, seasonal and occasional-use households, more than 21x the increase in multichannel subscribers over the same period. The result is a persistent dip in the multichannel penetration of occupied households in the US.

According to SNL Kagan‘s overlay, the three primary platforms accounted for 84.7 per cent of the occupied homes in the US, down both sequentially and annually and off of the high point of 87.3 per cent registered in first quarter 2010.

The cable industry posted a net loss in fourth quarter 2012 that was a significant improvement over the previous two quarters, but outpaced the segment‘s performance in the year-ago quarter. SNL Kagan estimates the industry dropped 418,000 video subs, a 0.7 per cent sequential decline. The segment lost 1.66 million video customers in 2012, an improvement over the 1.8 million dip in 2011.

The telcos are experiencing slowing growth as their penetrations rise. The industry was still the driving force in subscriber growth, with more than 1.4 million new video customers in 2012. However, the momentum is slowing, down from nearly 1.6 million in 2011.

DBS providers built on their slice of the video segment, but with net adds of 288,000 in 2012 — down from the nearly half a million new subs added in 2011 — growth is becoming more difficult to come by.

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