TV Cord-Cutting Could Still Be Worse

Top Cable, Satellite and Telco Providers Lost Just 75,000 Video Subs in the Latest Quarter

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The top pay-TV companies lost a total of 75,000 video subscribers in the third quarter, triple the decline of 25,000 one year earlier, as digital alternatives and destructive incidents like Time Warner's blackout of CBS took a toll. But in some ways the figures actually suggest a certain resilience.

Wall Street research firm MoffettNathanson said it's surprising the latest decline wasn't worse.

For one thing, there were 366,000 fewer new occupied dwelling units in the third quarter of 2013 than there were a year earlier, according to a research note from MoffetNathanson analyst Craig Moffett. "What is perhaps more interesting than the fact that pay TV declined is that it didn't decline more than it did," Mr. Moffett wrote.

Both satellite and telco providers also added more subscribers than the third quarter last year, demonstrating consumers' continued willingness to pay for big bundles of channels. Dish Network and DirecTV actually beat expectations, adding 35,000 and 139,000 subscribers, respectively. AT&T's U-Verse and Verizon's Fios also combined to add 400,000 subscribers.

That helped offset the continuing struggles for cable. Time Warner Cable in particular pulled down the category by losing 306,000 video subscribers during the quarter. The churn, more than double the loss of 140,000 video subscribers in the same period last year, was primarily a result of its carriage battle with CBS, which resulted in a month-long blackout of the broadcaster.

Video subscribers

In total, the top four publicly-traded cable operators lost 499,000 subscribers during the quarter compared with 340,000 in 2012.

And as cable continues to shed subscribers, online video platforms, like Netflix, are picking up steam. In fact, Netflix now boasts more than 30 million subscribers, topping even the biggest MSO, Comcast, which has about 21 million TV subscribers.

Netflix added 1.3 million U.S. subscribers in third quarter, compared with 1.16 million in the same period last year.

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