No growth in Pay TV

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No growth in Pay TV

Postby jon » Wed Nov 07, 2012 12:39 pm

So, why the feeding frenzy in takeovers of companies that own "Content"?

Pay TV unplugged
Cable, dish & telcos all in doldrums
By CLAIRE ATKINSON
New York Post
Last Updated: 3:23 AM, November 7, 2012
Posted: 11:40 PM, November 6, 2012

The US pay-TV industry is officially a zero-growth business.

Distributors — cable companies, satellite operators and telcos — reported a slowdown in subscriber growth in the third quarter, even as the pace of household formation is picking up.

The anemic growth in the face of a housing turnaround underscores the growing hard reality of the sector — households are cord-cutting and seeking out TV programming via alternative means.

The pay-TV business, as measured by the number of subscribers, was basically flat in the third quarter compared to a year ago.

Meanwhile, housing formation is picking up, hitting 810,000 on an annualized basis in the second quarter, according to Bernstein Research, which quoted the latest Census Bureau statistics available.

Noting the divergence of the two key metrics, Bernstein analyst Craig Moffett noted, “Pay TV penetration of America’s households is therefore falling, even while the number of Pay TV subscribers is still inching higher.”

Dish reported earnings yesterday, and executives there described a sad picture of stagnation.

“The industry will have to rethink its entire business model and strategy,” CEO Joe Clayton said in a conference call with Wall Street analysts.

Chairman Charlie Ergen chimed in, adding: “The world has changed, video has gotten expensive, and you have to redefine your business every 20 years.”

He added that the “power is with the programmers,” while Web and mobile distribution mechanisms are proliferating.

Many in the pay-TV industry have long expected Dish, as growth gets stymied, to be forced to combine with satellite leader DirecTV.

The doom-and-gloom talk is seen by some as an incentive for such a hookup.

Dish lost 19,000 net subscribers in the third quarter, fewer than analysts expected. DirecTV added 67,000 US subscribers, fewer than the 99,000 Wall Street had expected.
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