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Cablevision Still Shaking Off Sandy

Still recovering from the wrath of Hurricane Sandy last fall, Cablevision Systems suffered a net revenue drop for the second straight quarter, as video and ad revenues both tanked. Cablevision reported Thursday that its first-quarter net revenues dipped to $1.52 billion in the first quarter, down 0.8 percent from the year-ago period, while its operating expenses climbed because of higher programming costs and higher employee salaries and benefits. Largely as a result, it posted a net loss of $16.1 million for the quarter, or $0.06 a share, reversing a net gain of $57.2 million, or $0.24 a share, in the year-ago period. Video revenues led the way down, dropping to $767 million, down from $801 million in the first quarter last year. Like most other major U.S. MSOs, Cablevision, the fifth largest cable operator in the nation, shed more basic video subscribers in the quarter, losing about 4,700 customers to slide just under the 2.9 million mark. In an earnings call with analysts, company executives blamed the "very modest loss" in video subscribers at least partly on the continuing impact of superstorm Sandy. They noted that they have still not been able to contact some customers in areas hit hardest by the hurricane. They also said they had to delay installing new set-top boxes and other equipment in some customer homes because of the storm's severity. But, as in the fall, Cablevision plowed ahead with its deployment of DVR Plus, its new network-based DVR product. The company is now completing its rollout of DVR Plus in northern New Jersey, the last part of the vast New York City metro area to be covered, said Kristin Dolan, president of the Optimum Services unit. She also reported the company's first customer totals for the premium product, saying that more than 300,000 video subscribers have signed up for it so far. In addition, Cablevision continued the rollout of its cloud-based Optimum Program Guide for digital set-top boxes. While declining to provide any figures, company officials said the guide is now available on its Cisco Scientific-Atlanta set-tops, as well as its Samsung boxes. While Cablevision lost ground on the video front in the first quarter, it made further gains on the high-speed data and voice fronts. The company added 23,000 data and 23,000 voice subscribers in the first three months, boosting its respective customer totals to almost 2.8 million data and almost 2.3 million voice. Cablevision officials said high-speed data is particularly shining as broadband use continues to surge. High-speed data revenues jumped to $330 million for the quarter, up from $303 million a year ago, due to higher customer totals and a $5 monthly rate increase that began to kick in last quarter. Complementing its high-speed data push, Cablevision is still rolling out Wi-Fi aggressively. The company, which has already deployed 80,000 hotspots throughout the New York area, continues to spend heavy on cap ex to expand and upgrade its Wi-Fi network. Cablevision CEO James Dolan said more than 1 million Optimum Wi-Fi customers have now used the wireless network. — Alan Breznick, Cable/Video Practice Leader, Light Reading
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