An Infonetics Reseach report just confirmed what many have suspected for some time--telco IPTV services like AT&T's (NYSE: T) U-verse are stealing market share away from cable operators because they are offering differentiated services.
According to Infonetics, worldwide video service revenue, which includes cable, satellite and telco IPTV services, grew in the first half of 2013 to $110 billion, a 2 percent increase over the second half of 2012.
However, in the first half of 2013, cable revenue market share fell in North America where video subscribers are declining at a pace of 1.5 percent to 2.5 percent annually. Telco IPTV and satellite revenue continue to rise in North America. "Whether it's an improved user interface, multiscreen video, or even DVR services, there are marked differences that have allowed telcos to grow their subscriber bases at a time when others aren't," said Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics.
Indeed, yesterday AT&T announced that it added 194,000 U-verse TV subscribers in fourth quarter and 924,000 for all of 2013, bringing its total TV customer base to 5.5 million. In its earnings call, CFO John Stephens also noted that the company had record low churn among its TV customers, indicating that people want the service and once they get it, they don't leave.
By 2017, Infonetics expects the global pay-TV market to hit $270 billion a 2012- 2017, a compound annual growth rate of nearly 5 percent.
- see this release
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