Pay-TV providers lost video customers in the latest quarter, and tempers are flaring in the industry over who is most to blame for the rising costs that are driving some subscribers to "cut the cord."
The net video customers lost by cable, phone and satellite-TV providers in the second quarter totaled about 380,000, according to Moffett Research LLC. That is just slightly better than the 393,000 customers the industry lost in the year-earlier quarter. Craig Moffett, senior analyst at Moffett Research, in a research note Tuesday, pointed to evidence of cord-cutting by showing that new household formation has shown "at least tentative signs of recovery" while "pay TV subscribership has not."
Dish Network Corp. DISH +0.45% on Tuesday said it lost a net 78,000 subscribers, compared with a loss of 10,000 the year earlier. DirecTV DTV -1.00% had reported a similarly weak quarter last week. Together, the two satellite providers lost a net 162,000 customers in the second quarter, compared with 62,000 a year ago. Both operators said the subscriber losses reflected their strategy of focusing more on attracting higher-value customers who would be willing to pay steeper bills and take on additional services.
Meanwhile, cable-TV provider Charter Communications Inc. CHTR -2.38% on Tuesday reported a loss of 48,000 video customers, slightly better than the 66,000 it lost a year ago.
Pay-TV providers have said that rising programming fees—demanded by media companies that own TV channels—directly affect the increases in cable bills that are pricing subscribers out of the market.
On Tuesday, a number of pay-TV distributors weighed in to support Time Warner Cable Inc.'s TWC -1.86% side in its blackout dispute with CBS Corp. CBS +0.26%over fees, in addition to giving encouragement to other companies that have faced similar stalemates.
Mediacom Communications Corp., a small New York-based cable company, said it commends Bright House Networks LLC, DirecTV, Dish and Time Warner Cable—which have engaged in bitter blackout disputes—for "taking a stand on behalf of television viewers against outrageous programming price increases."
Meanwhile, Cox Communications Inc. said that "the industry has to find a way to work together to address the path we are on with respect to rising content fees."
CBS said Tuesday that it has been the top-rated TV network for "10 of the last 11 years" and said that some of the critics in the pay-TV business were taking advantage of the dispute to poach Time Warner Cable subscribers even as they voiced support for their rival.
Dish Chairman Charlie Ergen said that the aggressiveness of broadcasters asking for fees will lead to "one of three things": Pay-TV industry consolidation, congressional involvement, or "new technology alternatives" like Aereo Inc.'s Web TV startup that will lead people to "just quit watching broadcast networks."
Indeed, some in the pay-TV industry have called for consolidation among cable operators in recent months, including Charter CEO Tom Rutledge. Mr. Ergen said Tuesday that if cable operators consolidate, it "might drive" Dish and DirecTV to reattempt a merger. A Dish-DirecTV merger fell apart several years ago under regulatory scrutiny.
Mr. Ergen said that Dish would "certainly look at DirecTV and putting Dish and DirecTV together because we think that's something that makes a lot of sense strategically." But he added that the two operators are pursuing "slightly different strategic directions, and we're not sure which one's right."
Dish has been buying up airwaves to enter the wireless business, believing that offering "bundles" of video and broadband like cable operators is the way forward. DirecTV, meanwhile, has looked to expand its online video strategy, including with a recent failed bid for online video outlet Hulu.
On Tuesday, Mr. Ergen addressed his plans for wireless in the wake of Dish's recent failure to snatch Sprint Corp. S +1.31% and Clearwire Corp. out of the hands of Japan's SoftBank Corp. 9984.TO -4.66% Mr. Ergen said that the option at this point for a "full blown acquisition and/or merger" in wireless would be "probably only T-MobileTMUS -2.59% at this point in time." But he said that "the other wireless providers" like Sprint still offer "some pretty good options" for network-sharing partnerships. Despite the increasingly fewer options for a partner Dish has as the wireless industry has consolidated, Mr. Ergen said he's "still very bullish on the wireless side of the business."
Write to Shalini Ramachandran at shalini.ramachandran@wsj.com
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