Top Pay-TV Firms Lost an Estimated 125,000 Net Video Subscribers in 2014

The 13 largest U.S. pay-TV providers lost about 125,000 net video subscribers in 2014, and annual net pay-TV losses in 2014 were 95,000 subscribers, comparable to 2013, said the Leichtman Research Group (LRG) in a news release Tuesday. In 2014, the top nine cable companies lost about 1.2 million video subscribers, the fewest since 2008, it said. In 2014, the top phone providers added 1.05 million video subscribers and satellite-TV providers added 20,000 video subscribers, it said. Comcast had the most video subscribers for cable, and DirecTV, the most subscribers for satellite TV, a spreadsheet in LRG's news release showed. Meanwhile, U.S. pay TV had modest year-over-year growth in Q4, Pivotal Research Group (PRG) said in a Tuesday report. Pay TV will also have growth in subscribers in 2015, PRG said. Pay-TV penetration in U.S. households declined 0.9 percent to 85.9 percent, it said. Broadband remains healthy and cable will continue to take net new broadband subscribers, PRG said. Wireline phone subscription losses dropped 50 percent year over year, PRG said. The cable industry faces the risk of reregulation, especially with reclassification of broadband as a Communications Act Title II service creating the "potential for regulation medium to long term," analyst Jeffrey Wlodarczak said. If the government doesn't approve Comcast's planned buy of Time Warner Cable, it could create a "temporary downside in all the names," he said. Other risks for cable include aggressive product price increases, increased competition from Google Fiber, potential over-the-top video competition and wireless substitution for phone and data, and rising programming costs, he said. The satellite-TV industry faces the risks of increasing competition and programming expenses, Wlodarczak said. If cable makes higher speeds more widely available, like 500+ Mbps, there could be Internet-based alternatives for satellite TV, he said. AT&T and Verizon pushed their video products "at the expense of satellite," he said. Satellite-TV operators lack internal triple-play bundle services, but since they are partnered with major telcos, the coming of 4G might help, he said. DirecTV focuses on the same market that regional Bell operating company and cable companies do, and Dish Network's market is at risk in the current economy and from consumers switching to over-the-top (OTT) alternatives, Wlodarczak said. OTT and retransmission rights will become substitutes for multichannel TV, he said.