Satellite and telco growth 'hit the wall' in Q3, analyst notes

Amid uncertainties about the futures of the ad market, the pay-TV bundle, and over-the-top distribution, the issue of cord cutting has been quiescent in third-quarter pay-TV earnings reports, says MoffettNathanson principal analyst Craig Moffett in a memo released Thursday.

Overall, however, video subscriptions remained somewhat flat, with publicly traded operators reporting an aggregate pay-TV customer loss of just 0.1 percent.

The notable trend, according to Moffett, was that cable sub losses continued to slow, while growth of satellite- and telco-based services "hit the wall."

On Thursday, DirecTV (NASDAQ: DTV) revealed that it had lost 28,000 video subscribers in the third quarter. Coupled with the 12,000 Dish Network (NASDAQ: DISH) says it lost during the period, Moffett declared, "Satellite's [pay-TV] share gains are over."

Indeed, the satellite sector picked up only 0.1 percent of overall pay-TV customer share in the third quarter factoring in cable's aggregate losses. This is compared to a 1.5 percent gain in the third quarter in 2012.

Similarly, while Verizon (NYSE: VZ) and AT&T (NYSE: T) didn't experience respective retrenchment for FiOS and U-verse, their share of the pay-TV universe slowed to 11.2 percent growth in the third quarter compared to 18.2 percent expansion two years ago.

In markets like New York, Verizon continues to poach customers from operators including Cablevision (NYSE: CVC), which lost 56,000 video subs in Q3. But overall, Moffett notes, satellite and telco operators are taking less market share away from cable these days.

"With growth from satellite and telco TV ebbing, cable's losses are slowing," Moffett notes. "Their 2.4 percent year-over-year video subscriber loss was the industry's best showing since 2009."

For more:
- read this Moffett Nathanson report (sub. req.)

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Related links:
DirecTV loses 28K subscribers in Q3 as cord-cutting fears again take hold
Dish loses 12K TV subscribers, misses Wall Street forecasts
Shammo: Verizon will increase FiOS video rates in Q4 to offset rise in content costs
AT&T adds 216K U-verse TV subscribers, passes 6M mark