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Winnipeg Free Press - PRINT EDITION
U.S. subscribers tuning out DirecTV for the first time
NEW YORK -- DirecTV, the United States' largest provider of satellite TV services, is losing subscribers for the first time, as the company tightened credit policies and consumer appetite for pay-TV services appears to have plateaued.
DirecTV Inc. said Thursday it lost 52,000 U.S. subscribers in the April-to-June period. Last year, it added 26,000 in the same period, which is seasonally the weakest of the year.
Other pay-TV companies have reported subscriber losses in the quarter. Time Warner Cable Inc., the second-largest cable company, said Thursday it lost 169,000 subscribers in the second quarter, a record for the company.
The second quarter is usually a weak one for pay-TV services because students cancel their subscriptions ahead of the summer holidays and some "snowbirds" cancel their winter home subscriptions before heading to their summer homes. For the past two years, the industry has lost overall subscribers in those quarters.
Cable, satellite and phone companies that sell TV services have made up for the losses with subscriber gains in other quarters, but the gains are running below the rate of population growth, indicating a slow erosion in the willingness or ability of households to pay for TV.
Surveys point to the cost of TV signals as being the chief reason households go without. In addition, more younger adults are living with their parents in the wake of the recession. But anecdotal evidence suggests some households are also eschewing pay-TV in favour of Internet video from Hulu, Netflix, iTunes and other sources.
Rapid subscriber gains in Latin America buoyed DirecTV's results, but earnings missed expectations. Net income was $711 million, or $1.09 per share, compared with $701 million, or 91 cents per share, a year ago.
-- The Associated Press
Republished from the Winnipeg Free Press print edition August 3, 2012 B14
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