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Previous Quarter Was Highest Ever for Cord-Cutting, Say AnalystsThe top 11 US pay-TV providers lost 665,000 subscribers in the last quarter, according to Leichtman Research Group Inc. (LRG) , compared with the previous record of 545,000 lost in the second quarter of last year. Earlier, MoffettNathanson LLC came up with a similar estimate of 708,000 subscribers lost for the quarter, again the worst-ever figures by its estimation. And it seems to be picking up pace, according to Leichtman: The firm estimated 705,000 pay-TV subscribers were lost over the past year, nearly double the 380,000 lost in the previous year. But MoffetNathanson's figures show a gentler decline. Their estimates suggest that operators lost 1.3% of their subscriber base in the second quarter compared with 1.2% in the first quarter of 2016. Given the seasonal impact of the second quarter, that doesn't sound too terrible. Both analysts agree that the major driver of losses are telcos, with cable operators doing a much better job holding on to their subscribers. MoffetNathanson estimates telcos lost 529,000 video subscribers in the second quarter, while cable operators lost 242,000. Meanwhile Leichtman estimates the top-six cable operators lost 225,000 video subscribers in the second quarter of 2016 -- amazingly, the fewest in any second quarter since 2006. Even among telcos, a major cause of subscriber losses is AT&T Inc. (NYSE: T), which has taken a clear strategic decision to migrate subscribers from U-Verse on to DirecTV. AT&T lost 391,000 subscribers in the second quarter, out of a total of 500,000 lost telco video subscribers, according to Leichtman. DirecTV Group Inc. (NYSE: DTV) meanwhile, grew by 342,000 subscribers over the quarter, mopping up a number of those departing AT&T subscribers. In fact, if we exclude the 281,000 subscribers lost by the Dish Network LLC (Nasdaq: DISH), the remaining major players have done remarkably well in a rather difficult quarter. So where are the growing losses coming from? It's the smaller operators, who account for the rest of the pay-TV universe. Cord-cutting is picking up pace but the larger operators are able to leverage fuller bundles, more advanced networks and better digital features and applications to hold on to their customers. The providers who are really being hurt are the smaller players without the same ability to negotiate for content, invest in network upgrades and deploy new digital services. Despite the consolidation that has occurred in the pay-TV sector in recent years, these numbers suggest we aren't done yet. It seems increasingly clear that in the US pay-TV market if you aren't big, you're dead. — Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation |
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On-the-Air Thursdays Digital Audio
ARCHIVED | December 7, 2017, 12pm EST
Orange has been one of the leading proponents of SDN and NFV. In this Telco Transformation radio show, Orange's John Isch provides some perspective on his company's NFV/SDN journey.
Special Huawei Video
Huawei Network Transformation Seminar The adoption of virtualization technology and cloud architectures by telecom network operators is now well underway but there is still a long way to go before the transition to an era of Network Functions Cloudification (NFC) is complete. |
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