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        ADD A COMMENT
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. 
From The Founder
Against the odds, Huawei is growing its telecoms networking equipment business in the US -- that should be ringing some alarm bells for domestic vendors.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
CEO Chat With Jeff Miller, ActiveVideo

8|28|15   |   19:05   |   (0) comments


Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
LRTV Huawei Video Resource Center
Vodafone: Mobile Money Is About Customer Trust

8|27|15   |   06.36   |   (0) comments


Light Reading spoke with Vodafone's Ian Ravenscroft about the unique responsibilities and opportunities facing operators handling customers' financial transactions over the network.
Telecom Innovators Video Showcase
Palo Alto Networks on Expanding in the Carrier/Service Provider Market

8|26|15   |   07:54   |   (0) comments


Alfred Lee from Palo Alto Networks tells Steve Saunders about their new chassis-based system, the PA-7080, and how it can benefit service providers compared to legacy firewalls.
LRTV Custom TV
Global Services Forum Preview

8|25|15   |   02:36   |   (0) comments


Light Reading's CEO and Founder Steve Saunders talks about Huawei's upcoming Global Services Forum with the help of Heavy Reading's Patrick Donegan and Teresa Mastrangelo.
Telecom Innovators Video Showcase
Infoblox on DNS Threat Index

8|19|15   |   04:39   |   (0) comments


Dilip Pillaipakam from Infoblox talks to Steve Saunders about his company's core network services.
Between the CEOs
CEO Chat With Ihab Tarazi, Equinix

8|14|15   |   20:18   |   (1) comment


Equinix CTO Ihab Tarazi talks to Light Reading founder and CEO Steve Saunders about the dramatic changes in the data center, cloud and interconnect markets and discusses the impact of SDN and NFV in the coming years.
Telecom Innovators Video Showcase
The Netformx Ecosystem

8|14|15   |   09:39   |   (1) comment


Ittai Bareket, CEO of Netformx, talks with Steve Saunders about the Netformx Ecosystem, which employs cutting-edge prescriptive analytics to help solution providers maximize profits.
Telecom Innovators Video Showcase
Versa Networks on Leveraging VNFs

8|12|15   |   07:37   |   (0) comments


Kumar Mehta, founder and CEO of stealth mode startup Versa Networks, talks with Steve Saunders about how providers can best leverage virtualized network functions (VNFs).
LRTV Custom TV
Transforming the Network Through OPNFV

8|5|15   |   7:09   |   (0) comments


Sandra Rivera, VP Data Center Group; GM Network Platforms Group, Intel Corporation, on OPNFV Arno and how the industry is coming together to accelerate the deployment of NFV and transform the network.
LRTV Huawei Video Resource Center
Huawei ONS Product Demo

8|3|15   |   6:01   |   (0) comments


Huawei shows at Open Networking Summit 2015 in Santa Clara how its SDN and NFV solutions embrace openness.
LRTV Custom TV
End-User or Enterprise Benefits to the New IP

7|30|15   |   04:27   |   (1) comment


Andrew Coward discusses what the New IP means to end users or enterprise customers. He explains compelling reasons, including how every customer can get their own network, from the transformation to the New IP.
LRTV Custom TV
Network Visibility & the New IP

7|30|15   |   02:23   |   (0) comments


Mukund Srigopal provides an explanation of what network visibility is and how it is essential as service providers transition to the New IP. In addition, the importance of the network packet broker is discussed.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
December 2, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
Cisco's cloud and virtualization portfolio can increase business agility and innovation by building a more flexible network architecture.
Hot Topics
Verizon Hums a Driving Tune
Sarah Thomas, Editorial Operations Director, 8/26/2015
Gogo Approved to Speed Up In-Flight WiFi
Sarah Thomas, Editorial Operations Director, 8/24/2015
Could Market Volatility Hurt Tech IPOs?
Dan Jones, Mobile Editor, 8/24/2015
Sprint's Claure: '3 to 5 Years' to Turnaround
Dan Jones, Mobile Editor, 8/25/2015
Like Us on Facebook
Twitter Feed
September 22, 2015
Media Begins With “Me”
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
Equinix CTO Ihab Tarazi talks to Light Reading founder and CEO Steve Saunders about data center, cloud and the impact of virtualization in the coming years.
Cats with Phones
Cats Are a Smartphone's Best Friend Click Here
Whoever said cats didn't live to please their humans?