According to the Leichtman Research Group, pay TV experienced a disappointing first quarter for 2013. Cable companies lost an estimated 263,735 subscribers, which may have been the result of an increase in cord-cutting. While satellite TV providers and phone companies offering television gained some subscribers, the numbers were lower than in previous first quarters. Further losses are anticipated for Q2.
“A bad first quarter is notable for the industry because that’s when it is usually the strongest,” reports GigaOM. “The industry added an estimated 445,000 subscribers in Q1 of 2012, and 470,000 in Q1 of 2011. But even with additions from satellite and phone companies, this year’s first quarter was only up around 194,000 — not enough to make up for previous-quarter losses.”
“First-time ever annual industry-wide losses reflect a combination of a saturated market, an increased focus from providers on acquiring higher-value subscribers, and some consumers opting for a lower-cost mixture of over-the-air TV, Netflix and other over-the-top viewing options,” wrote Bruce Leichtman, president of LRG.
Leichtman has been skeptical of the cord cutting phenomenon in the past, but GigaOM suggests the latest numbers should cause concern. While cable has been experiencing a downturn in recent years, the slowing growth in the satellite TV segment is significant, since this is where many price-conscious consumers have been turning as an alternative.
The article points out that this could be “a sign that people aren’t just looking for a cheaper pay TV option anymore, but actually want to get rid of the traditional pay TV bundle altogether.”