Pay-TV operators ditching lower-income customers, driving up average revenue per sub, analyst finds

A focus on higher-income customers by pay-TV operators is driving both cord-cutting and average revenue per customer, said Strategy Analytics analyst Jason Blackwell. "Over the past few quarters we have seen price increases from Dish Network and DirecTV as well as other Pay TV operators," Blackwell said. "But, there is also evidence from our primary research that cord-cutters could actually be driving up the ARPU (average revenue per user) as well. We are finding that a large number of those people who have dropped a pay TV service have lower household incomes."

In a report issued the week of Aug 17, Blackwell noted the contrast between a record-setting second quarter for cord-cutting and sharp increases in per-customer revenue. DirecTV, for example, lost 133,000 subscribers during the second quarter, but saw per-customer revenue increase by 6.4 percent to $109.93. Dish Network lost 81,000 customers in the second quarter but had a 4.4 percent increase in per-user revenue to $87.91.