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Ten Companies Running Out Of American Customers

4. TiVo

TiVo was once the only standalone digital video recording product. But for more than five years, cable companies have offered the same service without the need to buy a special device. At the end of October 2008, TiVo had a subscriber base of 3.45 million customers. That number dropped to 2.7 million in 2009 and 2.27 million last year, amounting to a 2-year decrease of 34%. Instant streaming available from Netflix (NASDAQ: NFLX) has also cut into TiVo’s customer base significantly. TiVo’s answer to its dilemma has been to file patent suits against Echostar (NASDAQ: SATS), AT&T (NYSE: T) and Verizon (NYSE: VZ). The IP door swings both ways. Microsoft recently sued TiVo for allegedly infringing on four patents. Ten years ago, when TiVo dominated the market, its shares traded for $50. The price is now under $10

5. Merck

The greatest cause of Merck’s (NYSE: MRK) costumer loss is that the pharma company’s drug patents are expiring.  In April 2010, the company’s treatments for high blood pressure and heart disease, Cozaar and Hyzaar, lost patent protection in the United States.  The sales of the drugs decreased from $861 million in the quarter ending September 30, 2009, to $423 million for the same period in 2010. Now that the drugs are no longer patent protected, generic manufacturers are taking  more Merck’s customers.


6. AT&T

In general, AT&T is doing very well.  Consolidated revenues increased 2.1% in the fourth quarter from the same period a year earlier. Wireless net subscription adds increased by more than 2.8 million.  But, the company cannot avoid the fact that people are getting rid of their home phones. Income from wireline voice services has dropped a full 12.8% in the three months ended Dec. 31, 2010, compared to that period one year earlier. Home phone customers have increasingly turned to VoIP and cellphones to take the place of the wireline phone that nearly every house in America had for nearly a century


7. USA Today

For years, USA Today was neck and neck with The Wall Street Journal for the lead in daily circulation among US papers. USA Today even held a comfortable lead over the Journal three years ago. But several bad years have pushed USA Today well into second place. For a six month period ending September 28th, 2009, the paper’s daily circulation was 2.3 million. For the same period in 2010, circulation was 1.8 million, a decrease of 21%. USA Today has suffered the same fate that most large dailies have as more people get their news online.

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8. Wal-Mart

Wal-Mart (NYSE: WMT) may finally be running out of room for U.S. expansion.  Sales at U.S. stores open for at least a year fell 1.3% in the third quarter.  This was the sixth consecutive quarterly decline.   Only 54 new Wal-Mart stores opened in the U.S in 2010., down from 112 in 2009 and 159 in 2007.  The company’s Sam’s Club business also lacks enough customers.  In 2007, 12 stores opened and in 2009 11 stores opened, with no closings either year.  But, in 2010, six Sam’s were opened and 12 were shut. Wal-Mart has such a substantial market share in the US that it has become progressively harder to grow. Smaller companies such as Target (NYSE: TGT) and Amazon.com are now a threat to the world’s largest retailer.


9. Nokia

Nokia (NYSE: NOK), the world’s largest  handset maker by unit volume, continues to struggle to maintain customers in the U.S. According to research company comScore, Nokia had only 7.2% of the U.S. market for mobile subscribers as of November 2010, less than Samsung, LG, Motorola (NYSE: MOT), and RIM (NASDAQ: RIMM).  This percentage is down 2.4% from September 2009’s market share of 9.6%.  The firm’s problems have caused Nokia’s stock to drop  75% since it peak value in the fall of 2007.  The huge success of the Apple (NASDAQ: AAPL) iPhone and smartphones using the Google (NASDAQ: GOOG) Android operating system has set the bar very high for phone manufacturers. Nokia has been unable to rise to the occasion as its operating system, Symbian, has also lost ground.


10. Dish Network

Recently, Dish (NASDAQ: DISH) earnings have increased. But, this is due to a higher monthly subscriber-generated revenue, not more customers.  The company has actually begun to lose more customers than it is adding.  For the quarter ended September 30, 2010, DISH had a net loss of about 29,000 customers.  This compares with a net gain of about 241,000 customers a year earlier.  Many of Dish’s subscribers are facing difficult times financially, leading them to cancel their satellite services. DISH is also losing business to cable TV and telecom company fiber to the home video products.

Charles Stockdale and Douglas A. McIntyre