Satellite TV Subscriptions Could Decline For First Time In History

Amid new competition from streaming-video services like Netflix (NASDAQ:NFLX) and Amazon on Demand (NASDAQ:AMZN), satellite TV could soon be losing customers for the first time since its launch in the mid-1990s. Last year, pay TV subscriptions declined for the first time ever. While subscriptions to satellite and telecom video continued to grow, the weight of cable’s decline was too great.

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Now satellite TV itself could soon be looking at losses. DirecTV (NASDAQ:DTV) recently reported weaker-than-expected growth for its second quarter, and analysts suspect that if the most popular satellite TV provider in the U.S. only added 26,000 subscribers, then the industry as a whole could be looking at declines. Forecasts already have Dish Network (NASDAQ:DISH), the nation’s second-largest satellite provider, reporting a significant decline that will more than offset DirecTV’s small gains. In the second quarter of 2010, while DirecTV added 100,000 subscribers, Dish lost 19,000.

A large part of the decline might be due to economic factors, with consumers unable to pay for more expensive pay TV services, and instead turning to cheaper options like Netflix (NASDAQ:NFLX), despite certain drawbacks and shortcomings when compared to cable and satellite, or just settling for broadcast television. Another problem is market saturation — there is little potential for growth, only decline.

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