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Cablevision's Ready for Streaming & Slinging

Cablevision Systems Corp. (NYSE: CVC) is closing in on the launch of its ambitious Remote-Storage DVR (RS-DVR) service as well as an offering that will let customers sling video from PCs to the TV screen.

Cablevision COO Tom Rutledge revealed on Thursday's earnings call that its delayed RS-DVR service, freed of legal entanglements with studios and programmers, will launch during the fourth quarter, starting in New York City.

Because content from the RS-DVR service can be streamed to any digital box -- even those without hard drives -- Cablevision is touting it as a whole-home DVR whose storage capacities can be expanded on the fly. (See Cablevision Won’t Disable Fast-Forward on RS-DVR, Cablevision RS-DVR Gets Limited Deployment, and DoJ: Butt Out of Cablevision RS-DVR Case .)

"Our plan is to end the purchase of physical DVRs soon after this first launch," he said. "We will use existing inventory in the interim for the remaining non-RS-DVR areas until we have completed the rollout of RS-DVR throughout our footprint."

Closer to launch is Optimum Link, a PC-to-TV media relay service that Cablevision first shed light on in February. That service, which will run at US$4.95 per month, will become available later this month, and let subscribers send photos, videos, documents, and other Internet content to the TV over Cablevision's broadband network. (See Cablevision to Deliver Net Content to Set-Tops and Netflix Cheers Cablevision’s PC-to-TV Play .)

Among other advanced video services, Cablevision has set an early-2011 launch for a service that will let customers shuttle linear and on-demand video from their traditional cable-TV subscriptions to broadband-connected TVs, iPads, and game players. However, that product will limit access to a customer's in-home network. Cablevision hasn't said when it might extend access out of home, as it's concerned about what copyright laws will currently allow. (See Cablevision to Deliver Live TV & VoD to iPad.)

Initially, that product "will essentially be an additional outlet, just like another TV is an additional outlet," Rutledge explained.

Financial update
Cablevision revenues rose 5.6 percent, to $1.81 billion, coupled with net income of $112.1 million, or 37 cents per share. (See Cablevision Posts Q3.)

While Cablevision's financial house was in order, its subscription base, like those of other MSOs, is feeling some strain, and could use a boost from some of the new products that are about to roll out.

Cablevision lost 24,000 video subs, more than the 13,000 expected by Wall Street. But it added only 10,000 broadband subs and 9,000 voice subs, light compared to the respective 21,000 and 23,000 that were anticipated by analysts.

Sanford C. Bernstein & Co. Inc. analyst Craig Moffett said Cablevision's past success with solid quarter-by-quarter growth may be finally catching up with it.

"For years, we (and others) have wrung our hands that Cablevision's growth will eventually have to hit a wall," he wrote in a research note. "It's simple math. Cablevision's penetration is already higher than that of any other cable operator for every service, and they face more competition from Verizon FiOS than any of its peers, even if, up to now, it hasn't had much of an impact."

— Jeff Baumgartner, Site Editor, Light Reading Cable

spc_markl 12/5/2012 | 4:19:29 PM
re: Cablevision's Ready for Streaming & Slinging

Cablevision has done a remarkable job in holding back Verizon's FiOS penetration.


Mark Lutkowitz, Telecom Pragmatics

Jeff Baumgartner 12/5/2012 | 4:19:20 PM
re: Cablevision's Ready for Streaming & Slinging

yes, they've offered a nice blueprint for other cable MSOs. But as digital penetration gets near 100%, it's going to be tought to grow that category... seems like they've already hit the ceiling. But will be interested to see how services like rs-dvr help out with video sub retention and acquistion in 2011.  JB

shygye75 12/5/2012 | 4:19:18 PM
re: Cablevision's Ready for Streaming & Slinging

Incumbency probably has more to do with Cablevision's "success" in retaining customers than anything else. In its latest survey of U.S. TV service subscribers -- results of which will be presented at Telco TV this week -- Heavy Reading again found that most consumers are content to stay with their incumbent provider. The two biggest factors that lead to customer defections are price of service, and customer relocation. Advanced features are very low on the list of customer priorities.

shygye75 12/5/2012 | 4:19:16 PM
re: Cablevision's Ready for Streaming & Slinging

Yes, Cablevision has been very aggressive in offering triple-play services at loss-leader prices to win new subscribers. Whether they are using that same aggressiveness to keep customers they already have isn't as clear. Although its subscriber base appears fairly stable in terms of total number, keep in mind that the value of that base does diminish to some extent when a long-term customer gets replaced by a new user coming in at a heavily discounted rate. Advanced services (with higher price tags) do take some of the pain out of this churn, but those services also carry greater cost.

spc_markl 12/5/2012 | 4:19:16 PM
re: Cablevision's Ready for Streaming & Slinging

Actually, Cablevision did bend over backwards more than the other CATV company in fighting off FiOS.  The MSO got out in front of the threat early and bundled everybody up with triple play.  Cablevision was also aggressive in extending out fiber such as in New York, including even deploying some FTTH. 


In contrast, Comcast and Cox were not as tough in terms of competition in the Washington, DC area.


Mark

Jeff Baumgartner 12/5/2012 | 4:19:15 PM
re: Cablevision's Ready for Streaming & Slinging

Just to alleviate any possible confusion, the use of sling and slinging in the hed and in the story are strictly in the verb sense... CVC, of course, doesn't use or license EchoStar's "Sling" technology, at least not yet.  JB

shygye75 12/5/2012 | 4:19:14 PM
re: Cablevision's Ready for Streaming & Slinging

Correct -- and Cablevision is now offering its aggressive pricing with no service contract at all, at least in some of its service areas.

Jeff Baumgartner 12/5/2012 | 4:19:14 PM
re: Cablevision's Ready for Streaming & Slinging

Wow, no service contract?  That's quite telling of how difficult it is for them to grow these days. JB

Jeff Baumgartner 12/5/2012 | 4:19:14 PM
re: Cablevision's Ready for Streaming & Slinging

There's also something to be said about the value of customers who are most likely to churn and swing back and forth between providers so they can take advantage of the latest promo.  I would not put them in the category of a high value customer, but a drain, at least for the service provider. JB

CraigPlunkett 12/5/2012 | 4:18:58 PM
re: Cablevision's Ready for Streaming & Slinging

Cablevision has had no contracts for quite some time.  They have also offered a very large Wi-Fi network across their footprint at no extra charge for broadband subs, which has helped quite a bit with retention.  

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