Subs may have drained, but Q2 pay-TV ARPU rises | Media Analysis | Business
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The reversal of fortune for the digital television operators in North America continued into the second quarter of 2015, as service providers in the US and Canada posted significant subscriber losses.

Total subscribers among the tracked operators declined at the highest rate we have seen so far. But there’s a bright spot: Higher average revenue per user.

The Strategy Analytics Service Provider Strategies (SPS) service report, Digital Television Operator Performance Benchmarking: North America, indicates that the top 20 tracked operators in the US (accounting for more than 95% of the total market) saw subscriber losses of 479,000, while the operators in Canada lost 53,000 customers.

Even the oft-touted digital platforms were not immune from the decline, as digital TV subscriptions in the US fell by 62,000. In Canada, digital TV subscriptions declined for the second straight quarter, falling by 9,000.

But while subscriber numbers have been on a roller coaster ride for many years, ARPU has almost consistently been on an upward trajectory. The same was true for Q2.

In the second quarter results, Dish Network lost 81,000 subscribers, even after accounting for growth in the company's new OTT service, Sling TV. At the same time, Dish Network's Video ARPU increased by 2.5% quarter-over-quarter and 4.5% year-over-year.

Similar increases were reported by DirecTV (up 6.5%), Charter (4.6%) and Time Warner Cable (1.4%).

Further, the firm believes that OTT services will become a profit centre for pay-TV.

"The subscriber losses in the second quarter were across all of the pay-TV platforms, including cable, satellite and IPTV,” said Jason Blackwell, director of the service provider strategies service (SPS) at Strategy Analytics. “However, going forward, we believe there are clear opportunities for the pay-TV providers as they begin to roll out over-the-top (OTT) video services similar to Dish Network's Sling TV offering."

He added, "Verizon will debut its OTT service this year, along with Comcast and CenturyLink. Although nothing has been announced, AT&T (with its DirecTV acquisition) is predicted to roll out an OTT video service, and the company is uniquely positioned to tie that into a variety of nationwide bundles that could also include fixed or mobile broadband, satellite TV, and wireless phone service."