Cable Cuts Video Losses in Q1
In a classic case of bad news/good news, US cable companies continued to lose video subscribers in the first quarter, but they lost fewer subs than at any time since the beginning of 2009.
In the latest report by Leichtman Research Group Inc. (LRG) , the nine largest US cable operators lost about 50,000 video customers in the quarter, while the two national satellite TV providers added 52,000 subscribers, and the top telecom TV companies added 258,000 video subs.
Comcast Corp. (Nasdaq: CMCSA, CMCSK) bucked the cable trend by adding 24,000 video customers in the first three months of the year, a pattern of growth that has held steady over the last two quarters. Executives at Comcast attribute the rise to the successful rollout of the cloud-based X1 service. (See Comcast Finds Sweet Spot With X1.)
In another hopeful sign for the industry, two other major MSOs joined Comcast on the plus side for the winter quarter. Charter Communications Inc. gained 13,000 subscribers, and Suddenlink Communications added 2,400 new video customers.
But most major MSOs still registered more losses. Time Warner Cable Inc. (NYSE: TWC) lost 34,000 video subscribers, followed by Cable ONE Inc. , which lost 14,331 subs; Cablevision Systems Corp. (NYSE: CVC), which lost 14,000 subs; and Mediacom Communications Corp. , which lost 8,000 subs.
Overall, cable companies slowed the rate of their subscriber losses, while satellite TV and telecom companies slowed their rates of gain. DirecTV Group Inc. (NYSE: DTV) added only 12,000 video customers after adding 21,000 in Q1 of 2013. Dish Network LLC (Nasdaq: DISH), however, bumped its numbers up by 40,000 subs, as compared to the 36,000 it added in the year-ago quarter.
On the telecom side, Verizon Communications Inc. (NYSE: VZ) added 57,000 FiOS video customers between January and March, but that's way down from 169,000 additions in the first quarter of 2013 as FiOS appears to be hitting the limits of its footprint. AT&T Inc. (NYSE: T) netted a very healthy 201,000 U-verse video customers, slightly down from the 232,000 subscribers it added in the first quarter of last year.
The latest results in the race for video subscribers come amid several proposed mergers and acquisitions in the pay-TV industry. In addition to Comcast's plan to acquire Time Warner Cable and the proposal for a new Comcast/Charter spin-off company to be headed by industry veteran Michael Willner, AT&T announced its intention on Sunday to acquire DirecTV for $48.5 billion. (See Charter/Comcast Tap Willner for Spinoff and AT&T to Acquire DirecTV for $48.5B.)
— Mari Silbey, special to Light Reading