Light Reading

TWC Cuts Video Losses, Boosts Data Gains

Alan Breznick
4/24/2014
50%
50%

Even if it's just playing for pride right now, Time Warner Cable appears to have raised its game to a new level.

In its most upbeat earnings presentation in some time, Time Warner Cable Inc. (NYSE: TWC) reported notably lower video subscriber losses and higher broadband and voice subscriber gains in the first quarter as the company began prepping for its pending buyout by Comcast Corp. (Nasdaq: CMCSA, CMCSK). TWC also started adding customer relationships again and substantially reduced its customer churn rate after suffering heavy subscriber losses across the board in the second half of last year. (See Comcast to Buy Time Warner Cable for $45.2B and TWC: Charter's Got Nothing on Us.)

Trying to put a positive spin on the continuing erosion of its pay-TV subscriber base, TW Cable said it lost "only" 34,000 video subscribers in the winter quarter, a big improvement over the 119,000 video customers that it lost in the same period a year ago and its lowest quarterly loss in five years. As a result, its total video sub base now stands at nearly 11.2 million.

In fact, TWC Chairman & CEO Rob Marcus said, the first quarter loss "was as good as we've seen in some time." TWC Cable CFO Artie Minson noted that the company's video subscriber performance improved month-by-month during the quarter, ending the period with an actual subscriber gain in March.

Despite the improved video performance, though, TWC's video revenues continued to slide in the quarter. Video revenues dropped to $2.5 billion, down 6.6% from nearly $2.7 billion a year earlier. Due to this drag and a smaller decline in voice revenues, the company's total residential services revenues slid 0.9% to just under $4.6 billion despite a healthy increase in broadband revenues.

On the broadband side, TW Cable enjoyed a truly standout quarter, signing up 269,000 high-speed data customers as it aggressively pursued DSL users. That's more than double the 131,000 broadband subs that it added a year ago and its best quarterly performance in that category in six years.

As a result, TW Cable now has close to 11.4 million broadband subscribers. That makes it the second major US MSO to have more broadband than video subs, joining would-be suitor Charter Communications Inc.

TW Cable also showed marked improvement on the voice front, netting 107,000 new phone subs. The gain, reversing a loss of 35,000 phone customers a year ago, was its best quarterly showing in the voice area in two years. The company ended the quarter with 4.9 million voice customers.

Thanks to these improved subscriber metrics, TW Cable boasted that it added 128,000 total customer relationships in the first quarter, the most it has added in more than seven years, boosting its total beyond 14.5 million. The company also signed up more double-play and triple-play customers, after shedding bundled subscribers in the second half of 2013.

TW Cable executives attributed the lion's share of the gains to reduced customer churn, after bumping up their marketing budget for subscriber retention efforts for the quarter. TWC COO Dinni Jain said the retention gains should be "sustainable" throughout the year even as the company institutes its annual rate increase this spring.

In response to an analyst question about the relatively weak performance of Verizon Communications Inc. (NYSE: VZ)'s rival FiOS service during the quarter, Marcus noted that his company saw its "most significant" churn reduction in markets where it competes with FiOS, such as New York. "That's something we're proud of," he said.

Calling it the company's "best subscriber performance in the last five years," Marcus credited his management team. "We have not taken our eyes off the ball" since the Comcast acquisition was announced two months ago, he said. Minson added that the stronger performance has continued through April so far.

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

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
4/28/2014 | 12:09:33 PM
Re: Video to broadband
SachinEE - Of course it's a different game entirely if TWC is acquired by Comcast, which seems likely. 
SachinEE
50%
50%
SachinEE,
User Rank: Light Sabre
4/28/2014 | 10:35:22 AM
Re: Video to broadband
According to the latest statistics by TWC, broadband subscribers are overwhelming video subscriber as time goes by. This is so despite the positive adjustments in video performance. The recent 11.4 million broad band subscribers at the TWC cable, who have earned the company a position as the second major US MSO, should help rejuvenate its efforts inclined more on the broadband side than on the video side. It is very clear where much of the revenues are. It will be interesting to see what happens when this transition hits the peek. 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
4/24/2014 | 6:14:36 PM
Video to broadband
Looks like the world is moving from video to broadband. It'll be interesting to see when that hits its tipping point, if it has not done so already. 
Flash Poll
From The Founder
The New IP is actually bigger even than business. Like another hugely important tech that Light Reading is digging into right now, the New IP has the potential to change the world by fundamentally advancing what it is possible for people to achieve with communications.
LRTV Huawei Video Resource Center
The Power of Five Convergences in OceanStor OS

3|4|15   |   6:24   |   (0) comments


OceanStor OS is Huawei's brand-new storage operating system. While inheriting the consistent high stability, reliability and performance from the company's previous storage products, OceanStor OS abounds in new converged storage features. Specifically, the new storage operating system achieves "five convergences" to lift storage convergence to a higher level.
LRTV Huawei Video Resource Center
4K Brings Extreme Video Experience

3|4|15   |   8:10   |   (0) comments


4K video is a hot topic in the video industry. It will certainly bring an extreme video experience to end users. At the same time, however, it will also pose a big challenge to operators. Check out this Huawei 4K experts' discussion about how operators can achieve success in 4K video service.
LRTV Interviews
DT's Virtualization Vision for Europe

3|4|15   |   10:23   |   (0) comments


Light Reading CEO Steve Saunders talks virtualization, cloudification and standards with Deutsche Telekom's Axel Clauberg at Mobile World Congress.
LRTV Custom TV
ZTE's Wireline at MWC 2015

3|4|15   |   6:35   |   (0) comments


Light Reading speaks with Jane Chen, ZTE's Senior VP of Wireline Business, about innovations in her product line at Mobile World Congress.
LRTV Custom TV
ZTE at MWC 2015

3|4|15   |   4:24   |   (0) comments


Dr. Dick Chen of ZTE USA gives Light Reading an overview of what's new at ZTE's pavilion at Mobile World Congress 2015.
LRTV Interviews
Ericsson CEO Talks Telco Data Center Tech

3|4|15   |   05:45   |   (0) comments


At Mobile World Congress, Ericsson CEO Hans Vestberg discusses telco data center technology, business models, small cells and more.
Between the CEOs
EXCLUSIVE: Cisco's Chambers on Reinvention

3|3|15   |   8:24   |   (1) comment


Light Reading CEO Steve Saunders talks transformation and virtualization – including Light Reading's independent testing of the vendor's virtualization solutions – with Cisco CEO John Chambers at Mobile World Congress in Barcelona.
LRTV Documentaries
The Three Cs of MWC15

3|2|15   |   2:33   |   (1) comment


My visit to this year's Mobile World Congress is going to dominated by three Cs – cloud, cells and coffee.
LRTV Huawei Video Resource Center
Huawei Shares Its Vision of the Future of Mobile Networks Innovations

2|26|15   |   2:30   |   (0) comments


Mobile broadband is changing our lives. It's reshaping the Internet, industry, and society. It allows us to freely connect with one another anytime, anywhere. At this year's Mobile World Congress, Huawei will share its latest insights and newest ideas and technologies that will shape the future of MBB. They will showcase their end-to-end MBB solutions that will ...
LRTV Huawei Video Resource Center
Accelerate Digitizing, Boost Digital Business

2|26|15   |   6:14   |   (0) comments


A new digital revolution is leading us to a better connected world. Together with millions of digital partners, Huawei will help CSPs to build their digital service ecosystem and aggregate a wide variety of digital services. In this video, we find out how Huawei is going to help CSPs implement digital operations.
LRTV Huawei Video Resource Center
The Secret Recipe to Enabling Hyper-Growth Industries

2|26|15   |   3:38   |   (0) comments


With a number of successful cases on network capability exposure, Huawei is going to share the secret recipe to enabling hyper-growth markets with a step-by-step approach.
LRTV Documentaries
BTE 2015 Is Bigger & Even Better

2|25|15   |   03:13   |   (4) comments


This year's Big Telecom Event (BTE) in Chicago is going to provide more opportunities than ever for networking, getting to grips with key industry challenges and opportunities and, equally as important, having some fun.
Upcoming Live Events
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
June 10, 2015, Chicago, IL
All Upcoming Live Events
Infographics
Net neutrality, broadband services and the current outlook on data consumption, as presented by the New Jersey Institute of Technology.
Hot Topics
Internet Pioneers Decry Title II Rules
Carol Wilson, Editor-at-large, 3/2/2015
Wheeler: We'll Enforce Title II 'Case-By-Case'
Sarah Thomas, Editorial Operations Director, 3/3/2015
Verizon Takes Radio Dot to Detroit, VoLTE Overseas
Sarah Thomas, Editorial Operations Director, 2/27/2015
FCC Adopts Title II Rules
Alan Breznick, Cable/Video Practice Leader, 2/26/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Check out Light Reading's interview with Jay Samit, the newly appointed CEO of publicly traded SeaChange International Inc. With a resume that includes Sony, EMI, and Universal, Samit brings a reputation as an entrepreneur and a disruptor to his new role at the video solutions company. Hear what he had to say about the opportunities in video, as well as the outlook for cable, telco, OTT and mobile service providers.