Tallying pay TV gains from the DTV transition


It was pretty clear that cable and satellite TV providers would gain some new subscribers when analog television came to an end. Now Wells Fargo Securities analyst Marci Ryvicker is out with estimates of just who gained how much.

Back before the transition actually took place, Ryvicker had been projecting that 900,000 over-the-air TV homes would begin paying for cable/satellite/telco service as a result of the change to digital TV. Now she has reduced that number to 653,000. That’s out of the estimated 18.3 million over-the-air only households prior to the DTV transition.

The biggest gain, she figures, will be by cable MSOs, 475,000 additional subscribers, with 137,000 for satellite TV and 41,000 to telco competitors, who are available in significantly fewer markets.

Given that the original February 17th transition date had been heavily promoted and that approximately 40% of all TV stations still shut off their analog signals in Q1, Ryvicker thinks that largest incremental subscriber benefit for the pay TV providers occurred in Q1. She estimates that 368,000 former over-the-air TV households switched to a subscription service in Q1.

By Ryvicker’s tally, cable giant Comcast gained 90,000 subscribers in Q1, followed by Time Warner Cable at 80,000, Cablevision 500 and all other cable operators 90,898. With only two satellite TV companies to tally, DirecTV is estimated to have added 47,016 subscribers and Dish Network 35,262. The telco services, AT&T U-Verse and Verizon FiOS, were estimated to have picked up 24,683 subs in Q1.

The second wave hit around the rescheduled June 12th transition date, but because of the timing for many MSOs making their quarterly subscriber counts, the analyst thinks cable numbers will be more impacted in Q3 reports than Q2. So, she expects to see the satellite TV counts boosted more in Q2 reports and cable more in Q3 reports.

RBR/TVBR observation: We note that Ryvicker once again needs new business cards without having changed her desk or phone number. The acquisition of Wachovia, primarily for its banking business, by Wells Fargo, occurred on New Years Eve. Just this week the former Wachovia stock brokerage/investment banking/analysis business was rebranded as Wells Fargo Securities, with Wells Fargo CEO John Stumpf declaring the company’s intention to “grow and invest” in the Wall Street business.