Technology | Media | Telecommunications

Thursday, April 07, 2016

American Pay-TV and Internet Market Recap for 2015

It's interesting to look back over the last few years of ups and downs within the American video entertainment and associated broadband internet access markets. The ongoing market transitions have created a volatile environment, where service providers react to the constantly shifting customer demand.

Leichtman Research Group (LRG) reported that the thirteen largest pay-TV providers in the U.S. -- representing 95 percent of the market -- lost about 380,000 net video subscribers in 2015, that's compared to a loss of about 150,000 subscribers in 2014, and a loss of about 100,000 subscribers in 2013.

The leading American pay-TV providers now account for 94.2 million subscribers -- the top nine cable companies have over 49 million video subscribers, satellite TV companies 33.7 million subscribers, and the top telephone companies 11.5 million subscribers.

Shrinking Demand for Pay-TV Service

Truly, 2015 was another year of transition for American pay-TV service providers. The top nine cable companies lost about 340,000 video subscribers in 2015 -- that's compared to a loss of about 1,215,000 subscribers in 2014.

Not including gains from Sling TV, American DBS satellite TV service providers lost about 450,000 subscribers in 2015. The leading U.S. telephone providers lost 130,000 video subscribers in 2015 – that's compared to a gain of about 1,050,000 net additions in 2014. Moreover, Telco net pay-TV adds in 2015 were the fewest in any year since the services started in 2006.

In summary, overall 2015 included significant up and down shifts for U.S. pay-TV providers, and it's all relative. You could say that the top cable providers cumulatively had their best year since 2006, because they had 875,000 fewer losses than in 2014. But the Telcos had 1,170,000 fewer net additions than in 2014 -- 2015 was their worst performance since they began providing video services in 2006.

Growing Demand for Broadband Internet Access

According to the latest LRG assessment, the seventeen largest cable and telephone providers in the U.S. -- representing 94 percent of the market -- acquired more than 3.1 million net additional high-speed Internet access subscribers in 2015. Annual net broadband additions in 2015 were 104 percent of the total in 2014, and the most net adds in any year since 2010.

The top cable companies netted 106 percent of the broadband additions in 2015 -- that's compared to 89 percent in 2014, and 82 percent in 2013. The leading cable companies added 3.3 million broadband subscribers in 2015 -- 124 percent of the total net additions for the leading cable companies in 2014, and the most net adds for cable in any year since 2008.

In contrast, the leading U.S. telephone companies lost about 185,000 subscribers in 2015 -- the first year ever for net Telco broadband subscriber losses. Was that an anomaly? We'll have to wait and see.

In summary, LRG reported that the top cable and Telco broadband internet service providers in the U.S. market cumulatively now account for nearly 90.5 million subscribers, and they collectively added more broadband subscribers in 2015 than in any year since 2010.