Pay-television may be in for some hard times this year, according to analysts, as they have said that there will probably be a drop in subscriber growth for 2007.
Especially noted were EchoStar Communications Corp. (DISH) and DirecTV Group Inc. (DTV) which they say will probably experience the greatest declines.
The major two reasons for the projected slowdown is the slow housing market in more rural areas and smaller cities and the emerging subprime loan crisis which came about from serving high-risk creditors.
"I do think that home growth has been a factor in the growth of the satellite subscribers in particular," said UBS analyst Aryeh Bourkoff. "Satellite subscriber growth in our view will slow into 2008 and potentially be negative in some markets where they face more competition from cable."
Thomas Eagan from Oppenheimer said that "Satellite will still get the majority of the growth in 2007 (in contrast to Cable), but we think it will be less than 2006 at around 1.75 million."
Last year DirecTV and EchoStar signed up 1.88 million subscribers between the two, down from the 2.3 million the signed up in 2005. The subscriber base of the two companies, as of 2006, stands at 28.95 million, with DirecTV accounting for 15.95 million and EchoStar 13 million.
Cable won't be affected as much as they've been targeting existing users with new products and services as their strategy for growth.
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