Last month it was revealed that the number of cable subscribers in the U.S. is dropping. In addition, the percentage of U.S. households that exclusively watch over-the-air TV programming is down to only 7%. These statistics suggest that the internet, and TV programming over the internet are becoming more popular than ever.
Market analyst firm IHS this week released research showing that IPTV is now growing. IPTV plans, which include Verizon's FiOS and AT&T's Uverse, gained 398,000 subscribers during the second quarter of 2013. This is close to the number of subscribers pay-TV (cable, satellite, and IPTV) providers lost during the same quarter - 352,000. IHS predicts that this year will be the first that pay-TV subscriptions show an overall decline, down to 100.77 million subscribers from last year's 100.89. IPTV now has 11% of the total pay-TV market share.
“Of the three segments in the U.S. pay-TV market, the IPTV sector is enjoying growth, especially in urban areas where it is luring subscribers away from satellite,” said Erik Brannon, U.S. television analyst at IHS. “In particular, satellite’s lack of a true high-speed Internet service or a triple-play bundling option puts it at a disadvantage when competing against IPTV and cable. Cable, meanwhile, has its own problems, including disagreements between operators and content providers over rising programming costs that squeeze customers in the middle.”
The causes for the shift away from pay-TV cited by IHS are the same ones discussed by other analysts and industry watchers. People cutting out cable (or young people who never sign up for cable) in favor on internet access to Netflix, Hulu, and other services will play a larger role in the future decline of pay-TV. In addition, the current high price of pay-TV services.