Cable Makes Comeback as Verizon Nabs Fewer TV Customers

Cable is making a comeback.

Comcast Corp. (CMCSA) added TV subscribers in the first quarter, its second consecutive gain after years of losing market share to phone companies. And Time Warner Cable Inc. (TWC), the target of its $45 billion takeover bid, reduced customer losses to the fewest in four years. Meanwhile, AT&T Inc. (T) fell short of analysts estimates for TV customer gains and Verizon Communications Inc. (VZ)s FiOS TV had its worst quarter ever.

Cable companies are matching competitors' pricing and unveiling new technology, like Comcasts X1 set-top box, to keep customers in the fold. The battle among cable, phone and satellite providers is growing more intense as the pool of potential customers shrinks. About 97 percent of U.S. households already subscribe to pay-TV, and younger viewers are increasingly shunning those bills and instead watching video online.

The outsized gains for the telco providers may be at an end, Paul Sweeney, an analyst with Bloomberg Industries, said in a note today. The U.S. pay-TV market is saturated and it has become essentially a zero-sum game.

Last year, the number of Americans paying for television fell for the first time. The industry lost 251,000 customers to about 100 million, according to research firm SNL Kagan.

With the traditional pay-TV market in decline, thats leaving phone and cable companies to focus on retaining customers instead of chasing new ones. Its a shift from the past few years when Verizon and AT&T built out their FiOS and U-verse TV offerings, reaching new customers while also stealing away cable customers.

Verizon Rebound?

Verizons Chief Financial Officer Fran Shammo said the company got tripped up in the first quarter and will return to bigger gains this quarter.

Meanwhile, Comcasts Chief Executive Officer Brian Roberts said technology improvements are giving it an edge in the market. The largest U.S. television service provider, with 22.6 million customers, introduced the X1 set-top box that gives people the ability to watch TV shows stored online and interact with social media.

We believe our X1 operating system provides our customers an unrivaled experience, making it easier to discover and enjoy tens of thousands of content choices, Roberts said on an earnings call earlier this week. Comcast is accelerating the deployment to customers and is now adding 15,000 to 20,000 X1 boxes a day.

See more here:
Cable Makes Comeback as Verizon Nabs Fewer TV Customers