We rarely agree with In-Stat, partly because it’s a rival, but also because, as a research company, it seems to have a one dimensional view of markets. This week it has come out with an explanation for the first fall in pay TV markets for about two decades ‘ it’s the recession.
We all reported the decline, where for the first time since anyone can remember, pay TV subscriber homes reduced in the US, despite the rise and rise of IPTV under Verizon and AT&T, and the continued slow growth of DTH services. In Q2 US pay TV households, taking in cable TV, IPTV, and satellite TV subscribers, saw a reduction of some 167,000 subscribers, with big falls coming only at cable companies.
It is certainly not the recession, or at least that’s only part of the story. We could take it if the story was a complex mixture of cable companies chasing higher ARPU, and focusing on broadband and voice service acquisition, and using the recession as an opportunity, while investor expectation is low, to eliminate late paying and low income families from their mix. But this is In-Stat buying the status quo. Once again, it feels that its job is telling its existing customer base that everything’s alright, it’s just the nasty recession, and any day now we can get on with business unchanged from the good old days.
‘There are several reasons behind the quarterly subscriber loss,’ says Mike Paxton, Principal Analyst. ‘While growing availability of over-the-top Internet video is spurring talk of mass ‘cord-cutting,’ this decline is not about canceling pay-TV in favor of Internet video. The main driver of these subscriber declines is the struggling US economy and high unemployment.’
It only goes to show that even if you have the subscriber numbers for the top 60 cable, top 75 satellite and top 70 IPTV pay-TV operators worldwide, it doesn’t mean you have a clue what’s going on. If it was just the recession, then cable will pick up all those subscribers once again when it goes away. But of course, it won’t.