Suddenly, the little engine that could just can’t as subscriber growth for IPTV providers – the lone bright star in the pay-TV constellation – has followed cable and satellite subscriber numbers off the track.
This time, it’s not about the economy, not about intra-provider churn, and it can’t be attributed to the “myth” of cord cutting. It’s about consumer choice and an increasing adoption of SVOD and OTT services.
AT&T U-verse TV and Verizon’s FiOS TV in the third quarter reported a net loss of 49,000 subscribers between them – the first time since U-verse launched in 2006 that IPTV subscriber numbers have declined.
AT&T lost 91,000 U-verse subs for the quarter, down 142%; that loss was partially offset by 26,000 subscriber additions to its DirecTV satellite subsidiary. And, although Verizon added 42,000 FiOS TV subscribers, that was still off 63% from a year ago.
Those numbers may seem like little bumps for the two telcos, but consider that:
- In 3Q 2014, AT&T U-verse TV added 216,000 subs and Verizon FiOS TV added 114,000.
- In 3Q 2013, AT&T U-verse TV added 265,000 subs and Verizon FiOS TV added 135,000.
- In 3Q 2012, AT&T U-verse TV added 198,000 subs and Verizon FiOS TV added 119,000.
- In 3Q 2011, AT&T U-verse TV added 176,000 subs and Verizon FiOS TV added 131,000.
Second quarter numbers for the two telcos were as anemic as the current quarter, as AT&T lost 22,000 subs and Verizon added just 26,000, compared to gains a year ago of 190,000 and 100,000 respectively.
Neither AT&T nor Verizon has been aggressively building out their IPTV footprints, but the recent numbers suggest that neither have they been pushing to expand their service in current footprints.
IPTV providers has been siphoning off customers from cable operators for several years, a process that has kept the ecosystem in a state of semi-stasis.
The first real cracks showed up in 2013 and 2014, when the overall industry saw net subscriber declines of 105,000 and 125,000.
Will 2015 be worse? We’ll learn a lot in the next week or two as cable operators and Dish, the lone independent (for now) satellite operator report their quarterly earnings.
The second quarter was a complete bloodbath, with losses estimated between 470,000 and nearly 600,000, depending upon the source.
A year ago, cable and satellite providers lost some 479,000 subscribers.