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Cable Operators

Course Correction: Subs Are On Upswing

3/12/2012 12:01 AM Eastern

Pay TV subscribers roared back
into positive territory in the last three months
of the year, mainly on the strength of improved
performance from cable operators.

That’s cause for cheer, but some analysts warn
against breaking out the party hats just yet.

Overall, cable operators lost about 318,000
video customers in the fourth quarter, a big improvement
over the 556,000 the sector lost in the
same period in 2010.

Most of the improvement was down to Comcast,
which shed just 17,000 video subscribers in
the period, down from the 135,000 it lost in the
prior year.

But all of the publicly traded cable operators
reported an improvement in subscriber rolls
from the same period in 2010.

For the period, Time Warner Cable lost 129,000
video customers (vs. 141,000 in 2010); Charter
Communications lost 46,000 subscribers (compared
to 62,000 in the prior year); and Cablevision
Systems lost 14,000 (vs. 35,000 in 2010).

While cable operators improved, satellite-
TV service providers and telcos saw their
subscriber growth stay about the same in the
period. Satellite companies DirecTV and Dish
Network added 147,000 net new customers in
the period, up slightly from the 133,000 they
added in the fourth quarter of 2010, according
to Sanford Bernstein cable and satellite analyst
Craig Moffett. Telcos Verizon Communications
and AT&T — which sell video through
their FiOS and U-Verse products, respectively
— added 412,000 new customers in the period,
down slightly from the 439,000 they added
in the prior year.

Moffett noted that pay TV performance in the
fourth quarter was a big improvement over the
16,000 customers the sector gained in 2010. But
the 214,000 additional customers is a drop in the
bucket compared to more than 100 million U.S.
TV households.

“Still there’s reason for, if not celebration, then
at least relief,” Moffett said in a research report.

The pay TV sector rose about 0.2% in the past
12 months, ahead of the 0.1% trailing 12-month
growth of growth the prior year.

“Broadly speaking, the cable operators accounted
for all of the improvement,” Moffett
added. “Individually and collectively, cable did
better than a year ago while the satellite operators
and telcos did about the same.”

He cautioned that with just 0.2% growth in
the entire sector, pay TV has become a zero-sum
game: Any growth comes at the expense of other
participants.

 

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April