Cord cutting having significant effect on US Pay TV market

A new study by Leichtman Research Group has showed that though 1.1 million new additional internet subscribers were added to the top cable and telephone providers in the US in the first quarter of 2013, the Pay TV industry is suffering overall.

The US market has lost approximately 80,000 subscribers over the past year, compared with the 380,000 additions over the prior year – its first ever annual net subscriber loss.

The 13 largest multichannel video providers in the US, which represent around 94% of the overall market, added 195,000 net additional video subscribers in Q1 2013, however this was down significantly on Q1 2012, in which there was a net gain of 445,000.

The results evidence a definite trend of cord cutting, which is having an impact on Pay TV as viewers watch an increasing amount of inexpensive content online.

Bruce Leichtman, president and principal analyst for Leichtman Research Group said: “First-time ever annual industry-wide losses reflect a combination of a saturated market; an increased focus from providers on acquiring higher-value subscribers; and some consumers opting for a lower-cost mixture of over-the-air TV, Netflix and other over-the-top viewing options.”