Although there are a handful of smaller operators that have not reported their 4Q11 numbers, there is enough information available to estimate the size of the North America broadband and video market for 2011. At the end of 2011, broadband subscribers reached 99.5 million and have most certainly passed the 100 million mark as this goes online. In addition, it appears that the pace of cord-cutting has definitely slowed during 2011.
So how did 2011 shape up? Here are the highlights:
Cable operators accounted for 67% of total net additions, compared to 29% for Telcos (both DSL and FTTH)
FTTH represented 64% of total Telco net additions
FTTH represented 5.85 million fixed broadband subscriptions, with Verizon representing 82% of total
Annual DSL net additions declined by 32% from 2010
Telco TV subscribers near 10M in 2011
Broadband penetration has reached 73.5% of households in the U.S. and 80.5% of households in Canada
Cord-Cutting Slows during 2011
Despite the continuing threat of cord-cutting, demand for pay TV services from North American operators experienced positive net additions during 4Q11 of nearly 300,000. Cable MSOs continued to take the big hits, losing nearly 300K (down from 450k in 3Q11), while Telco IPTV and Satellite picked up the slack during the quarter. Cable represents 58% of the market, followed by Satellite at 33% and Telco at 7%.
Comcast remains the largest Pay TV operator in North America with 22.34M subscribers, followed by DIRECTV with 19.9M. During 4Q11, AT&T experienced the largest net additions at 208,000, followed by Verizon with 194k. Comcast experienced the smallest decline in in subscriber losses – losing only 17k – its strongest quarter in 5 years.
From a year-over-year perspective, AT&T leads with 805,000 net adds, followed by Verizon at 701,000 and DIRECTV at 662,000.
From an ARPU perspective – DIRECTV broke through the $100/month mark during 4Q11, while other operators saw annual ARPU increases of anywhere from 4% to 8%.
With the introduction of services such as Comcast’s Xfinity Streampix and the continuing evolution of TV Everywhere and Multi-screen services, cord-cutting is becoming less relevant – especially given the increases in ARPU across the board. Although some of this increase is associated with price hikes; adoption of advance services continues to grow.