Bad news for OTT; cord-cutting fears seem baseless

Looked at through the seasonality prism, it hardly appears that the pay-TV industry is going away and over-the-top is taking over the roost. In fact, the opposite might be true, proving, perhaps, that numbers can lie.

A study of second-quarter subscriber figures announced by major pay-TV operators seem to indicate that OTT--or at least alternate means of watching television--is defeating the staid pay-TV industry. Multichannel video programming distributors (MVPDs) lost a total of 198,000 video subscribers during the period, "the worst aggregate number they've posted in at least the last 10 quarters," said a story in Variety.

DirecTV (Nasdaq: DTV) lost subs for the first time ever; AT&T (NYSE: T) and Verizon (NYSE: VZ) saw "their smallest increases in nine quarters;" Comcast (Nasdaq: CMCSA) was down 176,000, Time Warner Cable (NYSE: TWC) was off 169,000; and Cablevision (NYSE: CVC) was basically flat, and a three-quarter string of MVPD net adds went the way of the Philadelphia Phillies playoff chances.

It would seem that cord-cutting for OTT was winning. Not according to the Variety story.

"The second quarter was always expected to be downbeat," the story continued.

True enough. Pay-TV numbers go down when vacations start and school years end. The numbers, the story said, are only slightly worse than last year and even a little better for cable.

And historically speaking, things are likely to get better. Last year a second-quarter loss was more than offset by a 933,000-subscriber gain in the third quarter.

The key takeaway for the second quarter could be the thing that's got feds fidgeting in their seats. AT&T and Verizon FiOS seem to have peaked, plateaued, whatever and are showing signs that the once-hot and always longed-for competition between the telcos and cable is waning.

"The telcos have all but given up as they increase their focus on wireless, letting cable make massive gains in the [wireline] category," the story continued.

And that leads to what may be the next step for cable and the pay-TV industry: broadband video. If the London Summer Olympics are evidence, broadband video over any number of devices--the pay-TV folks call it TV Everywhere--could be on the rise, pushing an "already healthy interest in cable's data offerings into the stratosphere," the story concluded.

For more:
Variety has this story

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