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Multichannel video subscription count drops by a quarter million in the US in 2013: SNL Kagan

MUMBAI: The US multichannel segment posted its first full-year decline in subscriptions, according to SNL Kagan estimates for cable, DBS and telco offerings at the end of 2013.

While seasonally driven quarterly declines have become routine for industry watchers, the annual dip illustrates longer-term downward pressure even as economic conditions gradually improve.

According to the tally for the trio of platforms, service providers collectively shed 251,000 in 2013, dipping to approximately 100 million combined subs. The industry added 40,000 video subscriptions in the fourth quarter, slightly weaker on a year-over-year basis and not enough to offset the broader downward momentum.

However, the fourth-quarter subscription bump did not carry enough magnitude to lift the penetration rates sequentially, according to SNL Kagan analysis. Housing formation was modest but still outpaced new subscriptions. The SNL Kagan approach that combines the U.S. Census Bureau categories of temporarily occupied and occasional use housing units produces a sequential net gain of 197,000 occupied units to nearly 115 million at year-end.

Losses from cable providers fueled the overall declines, but the estimated figures for the industry did show some improvement in the fourth quarter on both sequential and year-over-year comparisons. SNL Kagan estimates cable operators lost nearly 2 million video subscriptions for the full year and 388,000 in the fourth quarter to finish 2013 with fewer than 54.4 million basic subs.

DBS growth slowed in the fourth quarter as both Dish Network and DirecTV focussed on high-value customers. Despite the headwinds, Dish and DirecTV controlled churn and produced net subscriber gains for the year, forestalling an annual decline for perhaps another year. The segment gained 101,000 subscribers in the fourth quarter, contributing to a year-end gain of 170,000 subscribers. Nearly all of the annual gain was contributed by DirecTV. Despite the loss of 162,000 subscribers in second quarter 2013, the DBS segment ended at 34.3 million subscribers.

The telco segment finished the year strong, led by AT&T Inc.’s U-verse. The combined multichannel video subscribers served by Verizon Communications Inc. Fios and AT&T. U-verse reached 10.7 million at the end of the fourth quarter, behind net adds of 286,000. CenturyLink’s PrismTV gained 9,000 subscribers to end at 175,000 customers, and Consolidated Communications Holdings’ IPTV product added 1,000 customers to end the year with 110,000.