What does it mean, “pay TV is a mature market?”

When DIRECTV’s Mike White says that US pay television is a “mature market,” what he really means is that it’s not growing very quickly. Sure, people are growing up, getting homes and putting in pay TV, but other people are leaving, cutting the cord or moving in with family. So the whole market doesn’t really grow. That means that any time one provider grows a lot, another provider has to shrink.

For the most part, the growing part has been done by satellite and telco (phone company) providers, while the shrinking part belongs to that most hated of corporations, the cable company. People have been leaving cable in droves for some time and that’s meant easy pickings for DIRECTV, DISH, Verizon, and AT&T. We’re finally beginning to see some cable companies fight back and that means fewer subscribers are defecting to satellite.

Is that the only reason that DIRECTV’s first quarter adds are softer than previous years? DIRECTV has focused on getting “quality” subscribers, folks who want the higher priced packages and who aren’t going to leave after two years, while leaving the rest to cable. These are the folks who change services every other year, or are chronically late in paying, or who qualify for all the free equipment but want the lowest package. DIRECTV hasn’t been chasing those folks.

But yes, they freely admit that they don’t want to chase cable’s tail while cable is chasing theirs, especially when there is so much money to be made in Latin America, which is now the source of much of their growth. So when Mike White says that it’s a mature market, he really means that it’s a game he doesn’t really want to play.

About the Author

Stuart Sweet
Stuart Sweet is the editor-in-chief of The Solid Signal Blog and a "master plumber" at Signal Group, LLC. He is the author of over 8,000 articles and longform tutorials including many posted here. Reach him by clicking on "Contact the Editor" at the bottom of this page.