Pay TV: Sub Numbers Down, ARPU Up

According to Strategy Analytics, although U.S. pay TV operators lost a ton of video subscribers in the second quarter, average revenue per ...

Linear TV still dominates video ad spending
Linear TV still dominates video ad spending
According to Strategy Analytics, although U.S. pay TV operators lost a ton of video subscribers in the second quarter, average revenue per user (ARPU) is up.

The research house says the top 20 tracked U.S. operators (accounting for more than 95% of the total market) saw subscriber losses of 479,000 while the operators in Canada lost 53,000 customers. Not all those losses were among analog video subs. Digital TV subscriptions in the United States fell by 62,000, and in Canada, digital TV subscriptions declined for the second straight quarter, falling by 9,000.

Despite the subscriber losses, ARPU has almost consistently been on an upward trajectory. In the second quarter results, Dish Network lost 81,000 subscribers, even after accounting for growth in the company's new OTT service, Sling TV. At the same time, Dish Network's Video ARPU increased by 2.5% quarter-over-quarter and 4.5% year-over-year. Similar increases were reported by DirecTV, Charter, and Time Warner Cable.

"The subscriber losses in the second quarter were across all of the pay TV platforms, including cable, satellite and IPTV. However, going forward, we believe there are clear opportunities for the pay TV providers as they begin to roll out over-the-top (OTT) video services similar to Dish Network's Sling TV offering," said Jason Blackwell, director of the service provider strategies service at Strategy Analytics. "Verizon will debut its OTT service this year, along with Comcast and CenturyLink. Although nothing has been announced, AT&T (with its DirecTV acquisition) is predicted to roll out an OTT video service, and the company is uniquely positioned to tie that into a variety of nationwide bundles that could also include fixed or mobile broadband, satellite TV, and wireless phone service."

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