A quarter of television subscribers in broadband households in the United States made changes to their pay-television service in the past 12 months. However, almost as many upgraded to a more expensive service as downgraded. While leading television service providers lost over 400,000 television subscribers in the second quarter, they also gained 300,000 broadband customers.
Pay television penetration in the United States has fallen from 87% in 2011 to 85% in 2015. Yet the research from Parks Associates suggests that 4% of pay-television users subscribed for the first time in the second quarter of 2015.
That’s almost 4 million homes subscribing to television for the first time, against a net loss of around 400,000 households over the quarter.
The research also suggests that 8% of subscribers switched to a new television service provider in the second quarter. That seems rather high compared to reported churn rates. For instance, DIRECTV reports monthly churn of around 1.5% of its 20 million or so subscribers, which is about 4.5% or about 900,000 customers a quarter.
Brett Sappington, the director of research at Parks Associates reports that people are considering their options, considering the hype around new online video services. At the same time, as he points out, a notable number of customers are upgrading their pay-TV services to higher tiers or premium features.
“Pay-TV adoption rates posted a small decline over the past four years. The recent heightened anxiety about cord cutting and cord shaving centers upon worries that this shift is impacting overall pay-TV revenues,” he said. “The overall volume of video consumed across platforms is as high today as it has ever been. As that consumption shifts to new devices and new content sources, revenues will inevitably shift as well.”
Notably, while the top ten pay-television services in the United States as reported by the informitv Multiscreen Index lost over 400,000 television subscribers in the second quarter, they gained over 300,000 broadband subscribers. Comcast and Time Warner cable added 368,000 broadband subscribers between them.
360 View: Entertainment Services in US Broadband Households is published by Parks Associates. The Multiscreen Index is published by informitv.