Light Reading
Despite losing broadband customers in the second quarter, Cablevision views data services and 'connectivity' as the key to future growth.

Cablevision Looks to Data as Great Savior

Alan Breznick
8/7/2014
50%
50%

Battered by intense competition from Verizon FiOS, Cablevision Systems is increasingly viewing broadband and WiFi services as its great savior.

On their second-quarter earnings call Tuesday, Cablevision Systems Corp. (NYSE: CVC) executives spoke extensively about their plans to refashion the fifth-largest US cable operator as a "connectivity" company. With the MSO continuing to shed video subscribers to Verizon Communications Inc. (NYSE: VZ)'s FiOS and other rivals, they emphasized that broadband services, not video services, offer the true promise for future growth.

"We see the data product as more important than the video product to the customer right now," Cablevision CEO James Dolan proclaimed. "It's connectivity that the consumer really wants."

Consequently, Cablevision officials are focusing on boosting broadband speeds, improving service quality and rapidly expanding their WiFi network throughout the greater New York metro area. Just last week the company announced that it had expanded its Optimum WiFi network to more than 1 million hotspots, largely through the deployment of new, dual-band "smart WiFi" routers in residential broadband customers' homes.

As he has before, Dolan said that Cablevision plans to leverage its blossoming WiFi network to deliver new revenue-generating products and services to customers. But, as on past earnings calls, he declined to disclose what the MSO will offer and when it will start doing so. Instead, he indicated that the eventual offerings will encompass both fast transmission speeds and high quality-of-service.

"We have a strategic advantage there, one we have not gone out and exploited," he said. "But I think you can anticipate that we will… I think you should look for Cablevision to actually lead the way."


For more of Light Reading's coverage of cable WiFi services, visit our cable WiFi content channel.


But, if Cablevision is counting on broadband to save the day, it will need to do better than it did in the second quarter. In contrast with most major US MSOs, the company reported losing 9,000 high-speed data subscribers, after adding 8,000 in the first quarter. As a result, the company closed June 30 with 2.779 million broadband subs, down slightly from a year ago.

Cablevision actually suffered subscriber losses across the board in the spring quarter, which is traditionally the worst for most cable operators because of seasonal moves. Besides the 9,000 lost broadband customers, it shed 21,000 video customers and 7,000 voice customers, pushing its total residential customers down 21,000 to 3.165 million, as FiOS aggressively promoted triple-play packages for about $70 a month.

Notably, even with the broadband sub loss, Cablevision now has more data customers than video customers, due to its heavier losses on the video side. It thus joins New York neighbor Time Warner Cable Inc. (NYSE: TWC) and Charter Communications Inc. as the major US MSOs with more broadband subs than video subs. (See Cable Broadband Surpassing Video: Moody's.)

Despite the latest damage wrought by FiOS, Cablevision officials vowed to maintain their relatively new "disciplined pricing" strategy and not match FiOS discounts. They also vowed not to engage in an upstream speed war with Verizon, which just began rolling out symmetrical download and upload speeds for all of FiOS's speed tiers. Instead, they said, they will keep their maximum upload speed at its current 35Mbit/s level, at least for now.

"I have no interest in chasing that dog down the track," said Wilt Hildenbrand, senior advisor, customer care, technology and networks for Cablevision. But, he noted, "we have some bullets left in the gun."

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(10)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
KBode
50%
50%
KBode,
User Rank: Light Sabre
8/7/2014 | 4:47:39 PM
Re: Competition
..."they must have some secret customer strategy they hope surely will keep them going."

I think it's probably called "Dolan waits for a sale to Comcast, Cox or Charter in a few years." 
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
8/7/2014 | 4:34:43 PM
Re: Competition
One wonders what the magic bullet might be for Cablevision. As pointed out, "Cablevision officials vowed to maintain their relatively new "disciplined pricing" strategy and not match FiOS discounts. They also vowed not to engage in an upstream speed war with Verizon."

If they're not chasing the competition, they must have some secret customer strategy they hope surely will keep them going.
KBode
50%
50%
KBode,
User Rank: Light Sabre
8/7/2014 | 3:04:14 PM
Re: Competition
Yes, I thought that was curious as well.

They've historically steered clear of data caps, but this executive team seems like the sorts that would be very interested in monetizing usage once cord cutting accelerates and people inevitably begin trimming digital voice products in broader scale as wireless call quality improves with VoLTE.
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
8/7/2014 | 3:01:34 PM
Re: Competition
Cablevision was a pioneer on many fronts -- they fought the network DVR battle, for instance. It's both puzzling and sad now that they seem to be still saying the right things but not backing up the big talk. 

And hearing anyone talk about monetizing WiFi without saying EXACTLY how is always a red flag for me. 
KBode
50%
50%
KBode,
User Rank: Light Sabre
8/7/2014 | 2:48:59 PM
Re: Competition
It's unfortunate to see, because Cablevision used to lead the market in terms of pushing the speed and service envelope. Early on they were a real innovation pioneer, and I saw customers reward them for it. They've made it very clear in recent years they're simply not competitively pressured (or interested) to move on speed or price.
MordyK
50%
50%
MordyK,
User Rank: Light Sabre
8/7/2014 | 2:44:19 PM
Re: Me 'n Guitar Jimmy
Big talk about broadbands potential from Cablevision, but as a Brooklyn resident in their territory I still see that all their promotions are for triple play and zero effort targeting broadband only or broadband+voice.
Liz Greenberg
50%
50%
Liz Greenberg,
User Rank: Light Sabre
8/7/2014 | 2:44:11 PM
Re: Me 'n Guitar Jimmy
Given that internet access drives almost everything now, it seems like a better measurement as well.  Another thought is to list internet only, video only, and combined thereby being able to get a true picture of total subscribers.  To be extremely accurate add those who also get voice services to the mix. The world is certainly not just video subs any more.
Liz Greenberg
50%
50%
Liz Greenberg,
User Rank: Light Sabre
8/7/2014 | 2:42:22 PM
Re: Competition
@kbode I think that your last sentence is the true summary...not much in the way of true competition.  To look at the Optimum website they seem convinced that they are not only competitive for features, including speed, but also price.  Hmmm...I wonder how their customers feel?
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
8/7/2014 | 11:26:23 AM
Me 'n Guitar Jimmy
I don't like admitting this, but I agree completely with James Dolan on the need for a massive shift in emphasis from video subs to broadband. The irony though is that it's content owners like Cablevision (through MSG and other properties) that are making video service less and less attractive for operators. And that's not even factoring in the damage inflicted on the Knicks and Rangers over the past 15 or so years.
KBode
50%
50%
KBode,
User Rank: Light Sabre
8/7/2014 | 10:32:09 AM
Competition
They won't boost speeds to match their primary competitor. They're also now refusing to seriously compete on price with their primary competitor.

Ah, U.S. broadband competition, where you get to have that choice (aka not very much actual competition at all).
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Documentaries
The Rise of Virtual CPE

1|27|15   |   01:38   |   (1) comment


As NFV strategies evolve from tests and trials to production telco networks, expect to hear a lot about virtual CPE (customer premises equipment) rollouts during 2015.
LRTV Documentaries
Optical Is Hot in 2015

1|23|15   |   01:56   |   (2) comments


Optical comms technology underpins the whole communications sector and there are some really hot trends set for 2015.
LRTV Custom TV
Policy Control in the Fast Lane

1|22|15   |   2:57   |   (0) comments


What's making policy control strategic in 2015 and beyond? Amdocs talks with Heavy Reading's Graham Finnie about the key factors driving change in the data services landscape. Find out what his policy management research reveals about the road ahead for policy control – and sign up for
LRTV Documentaries
Highlights From the 2020 Vision Executive Summit

1|21|15   |   4:33   |   (2) comments


In December 2014, Light Reading brought together telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Cisco's Doug Webster shared his company's ...
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Harmonic, Helping Carriers Accelerate 4K Video Deployment with Huawei

1|20|15   |   5:42   |   (1) comment


At IBC, Peter Alexander, Senior Vice President & CMO at Harmonic, speaks about the growing interest in pay-TV service and its branching into multiple devices.
LRTV Huawei Video Resource Center
Sony Marketing Director Olivier Bovis Discusses the Outlook for 4K and Cooperation With Huawei at IBC 2014

1|20|15   |   6:50   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Envivio, Helping Carriers Accelerate 4K Video Deployment

1|20|15   |   2:57   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Pay-TV's Networked Future

1|20|15   |   6:29   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about the future of the pay-TV industry and its transition.
LRTV Huawei Video Resource Center
Jeff Heynen: Distributed Access Will Help MSOs Compete in the Future

1|20|15   |   2:26   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about moving to distributed access and the future trend of cable business.
LRTV Interviews
Cisco Talks Transformation

1|20|15   |   13:02   |   (0) comments


In December 2014, Steve Saunders sat down with Cisco VP of Products & Solutions Marketing Doug Webster at Light Reading's 2020 Vision executive summit in Reykjavik, Iceland. They spoke about Cisco's approach to network virtualization as well as how service providers can begin to monetize high-capacity networks through the end of the decade.
LRTV Interviews
Bob Wilson, Arsenal Legend: The Light Reading Interview

1|16|15   |   35:36   |   (3) comments


Arsenal goalkeeping legend Bob Wilson was Light Reading's guest interviewee at the 2020 Vision Executive Summit in December. See what the former soccer star and sports broadcaster had to say when he took to the stage in Iceland.
LRTV Custom TV
What MEF Third Network Initiative Means for SDN & NFV

1|14|15   |   6:13   |   (0) comments


Vitesse Semiconductor CTO Martin Nuss discusses the importance of the MEF Third Network initiative and why it's good news for SDN/NFV industry initiatives.
Upcoming Live Events
February 5, 2015, Washington, DC
February 19, 2015, The Fairmont San Jose, San Jose, CA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
September 9-10, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
December 1, 2015, The Westin Times Square, New York City
December 2-3, 2015, The Westin Times Square, New York City
Infographics
Hot Topics
Google Continues Gigabit Expansion
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/27/2015
BlackBerry Wants Net Neutrality Protection – That's Just Sad
Mitch Wagner, West Coast Bureau Chief, Light Reading, 1/22/2015
Verizon Ready for Google MVNO Challenge
Dan Jones, Mobile Editor, 1/22/2015
FiOS Picks Up Pace Again
Alan Breznick, Cable/Video Practice Leader, 1/22/2015
Indiana Carrier Takes Fiber to the Farm
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/22/2015
Like Us on Facebook
Twitter Feed
Webinar Archive