• by Daisy Whitney , Op-Ed Contributor, May 15, 2015

Multichannel video providers can relax -- at least for this quarter.

The top 10 multichannel video providers added 54,800 subscribers in the first quarter of this year, according to informitv Multiscreen Index.  That is a welcome uptick from a loss of 232,100 in the prior three quarters. Of course, MVPDs might not want to rest on their laurels yet given the trajectory of recent quarters.

Nonetheless, these stats are reassuring for MVPDs, as they suggest that over-the-top services might not be so cannibalistic. In fact, both over-the-top services and traditional pay TV might be able to co-exist nicely. At the same time that MVPDs gained subs, over-the-top services have also been growing rapidly. All signs suggest over-the-top services will continue to rise, given fare available from the likes of CBS, HBO, and others. Pricewaterhouse Coopers had said the over-the-top markets will jump from $3.3 billion to more than $10.4 billion in 2018.

“Although OTT may just be ramping up, it’s clear that it empowers consumers with something they have not had before—the ability to get the content they want, when they want, where they want, directly from the content owner,” said Limelight Networks in its just-released annual report on online video. “Still, as pointed out previously, we are in the nascent stages of OTT’s growth—online video represents only a fraction of content consumed as part of the ‘television experience.’”

What’s particularly interesting from the Limelight report is that while many consumers say they are interested in cutting the cord, few have done so. About 90% of consumers said they are open to canceling their pay-TV services in favor of over-the-top, under the right circumstances, according to Limelight. In many cases, the right circumstances involved cost as well as convenience. However, the industry does not appear to have reached that convergence point yet where consumers are indeed snipping the cable wire.
According to informiTV, Verizon had the greatest gain among MVPDs, with 90,000 new customers in the quarter, while AT&T added 49,000. DirecTV added 60,000, while Dish lost 134,000. Comcast lost 8000, and Time Warner cable gained 30,000. Altogether, the top 10 multichannel video services have gained 1.32 million new customers collectively over the last three years.