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Pay TV Operators Added 300,000 Subscribers in Fourth Quarter

SNL Kagan says premium networks gained 2.2 million subs, led by Showtime and Starz, with HBO bringing in its biggest quarterly gain since 2006.

NEW YORK - Pay TV operators added 300,000 net subscribers in the fourth quarter of 2011, ending the year on a high note and confirming analysts' forecasts that cord cutting fears would be allayed somewhat in the latest quarter.

The final pay TV subscriber count comes from SNL Kagan, which is typically seen as the authority on these figures, but Wall Street analysts had also predicted growth, with some saying the cord cutting debate would likely take a break until the traditionally tougher second quarter.

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SNL Kagan said cable operators lost 278,000 subscribers in the fourth quarter, satellite TV firms added 147,000, and telecom companies gained 431,000. Overall, the gain reversed declines seen in the second and third quarters.

For the full year 2011, the pay TV industry, including cable, satellite TV and telecom companies, added 280,000 subscribers, ending it with 100.38 million, according to SNL Kagan.

Janney Montgomery Scott analyst Tony Wible said that the fourth-quarter figures show that "cable's decline is slowing." But he warned that it was not all positive news for pay TV operators and those who say cord cutting fears are overblown.

"While this is a positive trend, it is worth noting that household penetration continued to drop in the fourth quarter as there were fewer subscriber additions than new residences," Wible said. "This would imply that newer households may be more inclined to use alternatives to a [pay TV] subscription."

Despite the only 300,000 subscriber net additions for pay TV firms in the fourth quarter, SNL Kagan said that premium networks added nearly 2.2 million subscription units during the quarter. CBS Corp.'s Showtime and Liberty Media-owned Starz led the pack with 700,000 and 595,000 additions, respectively.

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Time Warner's HBO added 190,000 subscription units, following two quarters of declines, hitting its biggest amount of quarterly net adds since June 2006, according to SNL Kagan. Sister network Cinemax grew by 25,000 subscribers.

For the full year 2011, premium networks added 5.6 million subscribers. The fourth quarter is generally one of the strongest for the premium networks.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai