Where Comcast Stands In The U.S. Pay-TV Market
The U.S. Pay TV market is not only extremely competitive but also mature, with TV present in almost 95% of households and Pay-TV penetration at over 85%. With the recent sluggishness in the housing market, booming broadband and the growing trend of cord cutting (generally in favor of online streaming), many Pay TV operators have been losing subscribers.
However, the cable industry remains massive at around $100 billion, catering to around 100 million subscribers. Accordingly, despite the subscriber losses, it still makes sense for companies such as Comcast, Dish Network and DirecTV to remain aggressive in the domain to maintain their share of the market. DirecTV (and AT&T, which owns DirecTV) leads the U.S. Pay-TV market with over 26% share, followed by Comcast at 22% and Dish Network at 14%, while Time Warner Cable, Verizon and others make up the remaining 38% of the market.
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In terms of subscribers, we project that Dish’s subscriber base could contract at a CAGR (compound annual growth rate) of 1.7% between 2014-2017, while the decline for Comcast is projected at 0.2% CAGR. However, AT&T, Time Warner Cable, Verizon and others together are projected to keep their subscriber bases roughly stable during the four year period.
Comcast has been gradually losing share in the Pay-TV market owing to intense competition, primarily from DirecTV and Dish. And with the FCC and other regulators likely to closely scrutinize any further proposed consolidation in the market, it will be difficult for Comcast to arrest the decline in its market share going forward. However, Comcast’s efforts to improve customer service, on-demand content and bundling streaming services with Pay-TV can help the company remain competitive. Also, the reduced pace of expansion of telcos’ fiber-optic services should benefit Comcast. In fact, Comcast is co-marketing its products with Verizon while the latter is focusing more on wireless services.
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