TV Subscriptions Fall for First Time as Viewers Cut the Cord
The U.S. pay-television market is passing its prime.
The number of Americans who pay for TV through cable, satellite or fiber services fell by more than a quarter of a million in 2013, the first full-year decline, according to research firm SNL Kagan. If the slide continues in the coming years, that means 2012 was the industry's high point.
It's not that viewers are watching less video. Online-streaming services from Netflix Inc. and Amazon.com Inc. continue to draw more users with shows like "House of Cards," charging fees of less than $10 a month. What's changed is that fewer people are willing to shell out $40 a month or more for the wider menu of cable channels.
The decline is small so far. Video subscribers across the entire pay-TV industry, which includes Comcast Corp., DirecTV and Verizon Communications Inc., dropped by 251,000 last year to about 100 million, SNL Kagan said in a statement today.
The industry has seen this coming for a while; research firm IHS said in August that TV subscriptions would decline to 100.8 million from 100.9 million in 2013. And cable companies have been suffering declines for years as satellite and phone carriers wrested away market share. In fact, DirecTV (DTV), Verizon and their ilk still gained TV subscribers last year — just not enough to make up for 2 million lost cable subscribers.
Pay-TV carriers have been preparing for this inflection point by developing services for watching video on tablets and smartphones. They're also investing to boost Internet speeds as broadband services become more popular, often at the expense of TV subscriptions.
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