North American PayTV numbers on the way down?
- Pay TV subscriber numbers inch down, but ARPU inches up
- OTT services may be the saviour
More a gentle slope than a cliff, but whatever it is, digital television operators in North America are falling slowly off it. In what Strategy Analytics calls a reversal of fortune, service providers in both the US and Canada posted subscriber losses in the latest quarter - a decline, says Strategy Analytics, which is at the highest rate it has seen so far.
The Strategy Analytics Service Provider Strategies (SPS) service report, “Digital Television Operator Performance Benchmarking: North America,” shows the top twenty tracked operators in the US (accounting for more than 95 per cent of the total market) saw subscriber losses of 479,000 while the operators in Canada lost 53,000 customers. Digital TV subscriptions in the US also fell by 62,000 and in Canada by 9,000.
Video ARPU for Selected US Pay TV Operators – 2Q14 to 2Q15
Time Warner Cable
Source: Strategy Analytics Digital Television Operator Performance Benchmarking: North America 2Q15
Subscribers down, ARPU up
However, the analysts point out that while subscriber numbers do tend to go up and down, the average revenue per user (ARPU) is always on an upward trajectory. So for instance, in the second quarter Dish Network lost 81,000 subscribers even after accounting for growth in the company’s new OTT service, Sling TV. But at the same time, Dish’s Video ARPU increased by 2.5 per cent quarter-over-quarter and 4.5 per cent year-over-year. Similar increases were reported by DirecTV, Charter, and Time Warner Cable.
“The subscriber losses in the second quarter were across all of the Pay TV platforms, including cable, satellite, and IPTV. However, going forward, we believe there are clear opportunities for the Pay TV providers as they begin to roll out over-the-top (OTT) video services similar to Dish Network’s Sling TV offering,” the press release has Jason Blackwell, Director of the Service Provider Strategies service (SPS) at Strategy Analytics, saying.
“Verizon will debut its OTT service this year, along with Comcast and CenturyLink. Although nothing has been announced, AT&T (with its DirecTV acquisition) is predicted to roll out an OTT video service, and the company is uniquely positioned to tie that into a variety of nationwide bundles that could also include fixed or mobile broadband, satellite TV, and wireless phone service.”
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