US cable celebrates ‘best quarter in years’ as pay subs rise

The US cable TV industry achieved its “best quarter in years,” stemming subscriber losses as the overall pay TV market – including cable, satellite and IPTV – rose by 202,670 subscribers in Q1.

According to IHS Technology, the overall pay TV gains marked the best performance for the market in a year, while a 132,330 fall in cable subscribers marked the lowest number of losses since the first quarter of 2011.

The IHS report notes that the last two years have been “brutal for the US cable industry” with subscribers falling by an average of 480,000 per quarter.

“The first quarter is generally the best time of the year for the US cable market, and the start of 2014 was no exception. Cable achieved its best quarter in years. However, the negative outlook for cable remains the same, as it is expected to continue to contract as AT&T’s IPTV service is anticipated to keep gobbling up subscribers. Cable’s renewed strength could be foreboding for satellite players Dish and DirecTV,” said Erik Brannon, IHS senior analyst for TV media.

In the quarter, Comcast added 24,000 video subscribers while Time Warner Cable narrowed its subscriber losses to 34,000, a “huge improvement” compared to its 118,000 subscriber loss in Q1 2013.

Among the major US pay TV providers, IHS said “broadband is compensating for the slower growth experienced on the video side of the business, but video still commands the most revenue and will continue to do so for the foreseeable future.”

A strong quarter from Dish “helped mask a soft quarter for satellite”, as DirecTV and Dish gained a combined 52,000 video subscribers in the quarter under pressure from IPTV providers.

The two largest US IPTV operators, AT&T and Verizon, added 258,000 video subscribers, compared to 401,000 in the first quarter of 2013, accounting for the weakest quarterly IPTV subscriber growth since 2007.

AT&T is said to be close to a US$50 million takeover of DirecTV, with reports this week claiming a deal set to complete.