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Cable Cuts Video Losses in Q1

Mari Silbey
5/19/2014
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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

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mendyk
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mendyk,
User Rank: Light Sabre
5/20/2014 | 1:36:14 PM
Re: Count the cord cuts
The doom and gloom paints cord-cutting as a snowballing phenomenon that will only grow over time. The snowball has not gotten very big, as the current facts show. And now it has melted a bit. Just as networks will change, video aggregation services will adapt. And, really, cord-cutting is incompatible with all broadband-delivered video service. So there.
KBode
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KBode,
User Rank: Light Sabre
5/20/2014 | 1:18:06 PM
Re: Count the cord cuts
"With 260K net adds for video services, it looks like cord-cutting has already run its course."

Not likely. This is a long game. We're talking a decade or more as networks improve and deals get struck. Also keep in mind that cable and broadcast spend BILLIONS in keeping Internet video disruption and innovation from smaller players at bay, whether that's in the form of lobbying, usage caps or restrictive liscening.

I think it would be a significant error to declare this a fight that has been won by the cable and broadcast sector. They've got a very tricky next ten years to look forward to.
KBode
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KBode,
User Rank: Light Sabre
5/20/2014 | 1:15:42 PM
Re: Count the cord cuts
Agree. More specifically I think it really comes down to live sports in a lot of households...
danielcawrey
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danielcawrey,
User Rank: Light Sabre
5/19/2014 | 4:50:55 PM
Re: Count the cord cuts
I think that people can only cord cut so much. As much as I personally like services such as Netflix and Amazon Prime, it doesn't offer the level of content that cable providers can. 

Live television has been guarded by these operators; as it should. I think that the online and on demand services have a place, but live TV is still live TV. 
jabailo
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jabailo,
User Rank: Light Sabre
5/19/2014 | 3:26:55 PM
Netflick
I've gotten to the point where I no longer spend time searching all over for entertainment or even specifically looking for a particular show or movie.   When I want to relax in front of the tube (I mean panel), and there's no pro-Sports on, I watch a "Netflix".  That is, I go to Netflix, and just pick one of the top recommendations.  If it's bad, I skip to the next, until I get hooked.   It's like what they used to call channel surfing...back in the 20th century when we had those things called channels.

I find that once I made myself see entertainment in terms of what is available, it changed my outlook.   For example, "Gold Rush", a 50 episode series about a group of unemployed construction workers who go to Alaska to mine gold.  I thought I'd get about halfway through episode one, but I ended up binging through the the thing over hte course of a week or two.   So that's 4% of my video entertainment year taken up by one show!
wanlord
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wanlord,
User Rank: Light Sabre
5/19/2014 | 2:27:23 PM
Re: Count the cord cuts
Anything to increase ARPU. Pop Up adds on my TV now... Or VOD programs embedded in broadcast line ups in the guide, so you select it thinking it's being broadcasted and it takes you into the slow VOD menu trying to get you to purchased it and you are lucky if you get out of VOD or DVR without the box crashing...

 

 
mendyk
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mendyk,
User Rank: Light Sabre
5/19/2014 | 2:13:21 PM
Count the cord cuts
With 260K net adds for video services, it looks like cord-cutting has already run its course.
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