Video services

Suddenlink Shrugs Off Video Sub Losses

Despite suffering higher video subscriber losses in the second quarter on a year-over-year basis, Suddenlink has no regrets about dropping Viacom programming from its cable systems last fall.

Suddenlink Communications Chairman and CEO Jerry Kent made that point very clear on the US cable operator's earnings call Monday. Speaking to financial analysts, Kent blamed the MSO's higher video customer losses in the spring quarter mainly on rate increases. He also noted that the company enjoyed its best second quarter ever in the video category last year, making comparisons with this year bound to look bad.

Suddenlink, the seventh-largest MSO in the US with about 1.1 million pay-TV subscribers, recorded a loss of 29,400 video customers in the quarter. That's markedly higher than the 18,700 video customers it shed a year ago, when it still carried all the Viacom Inc. (NYSE: VIA) networks.

Since dropping Viacom programming last October after declning to renew its carriage deal because of the soaring cost, Suddenlink has now lost more than 68,000 basic video subscribers. But, while conceding that the elimination of Viacom networks has had some impact on their sub numbers, MSO executives have shrugged off those losses because of the cuts they've been able to make in programming expenses.

"The bulk of the headwinds is behind us," Kent said. "There's some minimal lasting impact. It certainly affects the connect side of the business. But if you compare the cost of putting Viacom back on versus the customers we'd saved if we did, it's night and day. There's no doubt we made the right decision."

Kent noted that ten months after Suddenlink replaced the Viacom networks with other, cheaper programming, Viacom is still hammering away at the MSO's customers through social media, reminding them that they can no longer view such networks as MTV, Comedy Central and Nickelodeon. But Suddenlink executives remain unmoved by the Viacom campaign.

"We've moved on," he said. "Evidently they haven't."

Want to know more about pay-TV subscriber trends? Check out our dedicated video services content channel here on Light Reading.

Less than a month after launching 1-Gig service in their first four markets, Suddenlink executives said they plan to extend the rollout to nearly two dozen other markets by the end of the year. Plans call for offering gigabit service to about 400,000 of their 1.2 million broadband subscribers by January and nearly 90% of their broadband customer base over the next couple of years. The company is also raising the maximum speeds of its other broadband tiers to 50 Mbit/s, 100 Mbit/s and 200 Mbit/s, respectively. (See Suddenlink Goes Full Blast.)

Suddenlink, which is seeking regulatory approval of its pending takeover by French telecom giant Altice , said it's making steady progress on that front. It still expects the $9.1 billion transaction, which will give Altice its first US foothold, to close in the fall.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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