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February 04, 2013

Verizon, AT&T Take Video Share, But at a Slower Rate

By Gary Kim, Contributing Editor

Verizon (News - Alert) and AT&T continue to add video entertainment subscribers, taking share from cable operators, but at a slowing rate, according to IHS Screen Digest says. Hurricane Sandy obviously did not help, but the rate of gains has been slowing for two years.

Verizon and AT&T (News - Alert) reported a combined gain of 326,000 net new IPTV subscribers   in the fourth quarter – down 19 percent from the 402,000 acquired during the same period in 2011, according to the IHS Screen Digest.

The fourth quarter dip was the second in a row, with the total for the last three months of 2011 down 7 percent from 430,000 in 2010.

For the entire year of 2012, net subscriber adds for the two U.S. IPTV (News - Alert) services amounted to 1.3 million – down 14 percent from 1.5 million in 2011.

Through 2017, both major U.S. IPTV players will continue to see their subscriber gains moderate, IHS Screen Digest predicts.

By 2017, IHS Screen Digest expects that IPTV in the United States will account for 13.4 million pay-TV households, or 10.8 percent of all pay-TV subscribers.

Verizon's FiOS (News - Alert) accounted for the majority of the slowdown. Verizon added 134,000 subscribers in the fourth quarter of 2012, “down from the 194,000 gained during same period in 2011,” said Erik Brannon, senior analyst for television research at IHS.

AT&T added 192,000 net new subscribers joined in the fourth quarter of 2012, only 8,000 less than during the same period in 2011. AT&T grew its U-verse video base by 19.6 percent for 2012.

Given the relatively smaller Verizon footprint, IHS Screen Digest predicts that AT&T will now begin to outpace Verizon for new subscribers. U-verse, for example, passes 72 percent more eligible video homes than FiOS.

Also, AT&T has lower video penetration of just 18.7 percent, compared to Verizon’s 33.3-percent take rate.

The number of U.S. IPTV subscribers will increase from 8.8 million at the end of 2011 to 18.6 million in 2017, according Parks Associates (News - Alert).

Satellite operator share of the U.S. video entertainment market is expected to drop slightly to 30 percent by 2017, while cable’s market share will fall more steeply to 52 percent, and IPTV’s stake will increase to 17 percent, Parks Associates says.

Cable video subscriptions will decline from 60.7 million in 2011 to 56.1 million in 2017.




Edited by Braden Becker
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