DirecTV has consistently reported strong organic subscriber growth in the US since the beginning of the economic recession in early 2008. During this three-year period, the satellite operator netted on average 198,000 new customers per quarter, which stood in stark contrast to the declines experienced by satellite competitor DISH Network and the cable operators. Even during the two-quarter period last year when the US pay TV industry posted its first loss ever in total TV subscriptions, DirecTV added 247,000 new subscribers, soothing concerns about industry-wide declines due to economic hardship or substitution with internet video. However, it now seems that DirecTV has begun to experience the same pressures that daunted the cable operators and DISH for years now.

In contrast, IPTV is still posting strong organic growth. AT&T U-verse and Verizon FiOS added 386,000 subscribers last quarter, but these gains were not enough to offset the big losses by Comcast, Time Warner Cable, Charter and many of the smaller cable operators. With DISH Network also expected to report substantial subscriber losses, IHS Screen Digest estimates there was an industry-wide loss of approximately 160,000-220,000 pay TV subscriptions in Q2 2011. We attribute this loss mostly to the fact that a growing number of households, which had initially held onto their TV subscriptions in 2009 and 2010, are now giving them up as hopes for a speedy recovery of the economy are all but quashed due to high unemployment and rising food and energy prices.