Tale of the tape: Tallying video subscriber losses
Cable operators continued to bleed video subscribers in the latest round of earnings reports, but they maintained that the losses were related more to the economy rather than over-the-top competition.
With privately held Cox Communications and Bright House Networks enjoying the view from the sidelines, all of the other top cable operators in the nation continued the trend of reporting basic subscriber losses.
The reasons include fewer new homes being built, continued unemployment, cut-rate offers from satellite video providers, and the loss of subscribers who had signed on during last year's broadcast digital transition.
In general, cable operators have steadfastly refused to acknowledge that some of the losses were related to OTT services from the likes of Netflix and Hulu. Time Warner Cable COO Landel Hobbs said his company has seen no evidence of cord cutting by college students in Columbus, Ohio, and Austin, Texas. At the SCTE Cable-Tec Expo last month, Comcasts Todd Walker said competition from OTT providers hasn't led to cord cutting by basic digital subscribers, but he acknowledged that OTT services have taken a bite out of Comcast's premium services.
So while some cable operators are downplaying the impact of OTT services, they're also developing tools and services to combat them. Time Warner Cable and Comcast are both working on iPad applications that make it easier to blend Internet services into TVs, while Time Warner Cable's Look Back service and Cablevision's network DVR application also seem like good bets to keep customers'eyes from wandering.
Throw in the remote DVR applications that video service providers are offering, including AT&T, and there's really no reason for subscribers to miss a show or, better yet, go to Hulu when they do miss a primetime favorite.
Here's a breakdown of video subscriber losses, with the rankings for the multichannel video programming distributors provided by the NCTA:
- Comcast lost 275,000 video subscribers in the third quarter, compared with 132,000 a year ago. Comcast was able to partially offset the losses with higher subscription fees and more uptake on premium tiers and DVR services. At the end of the third quarter, Comcast had 22.9 million subscribers.
- DirecTV was a winner in the recent video subscriber sweepstakes with the addition of 174,000 subscribers. DirecTV now has 18.9 million subscribers.
- Dish Networks lost 29,000 net subscribers in the quarter to finish with 14.3 million.
- Time Warner Cable lost 155,000 video subscribers in the third quarter, compared with 132,000 a year ago. Instead of seeing an uptick in customers migrating to digital tiers, Time Warner Cable lost subscribers, which contributed to lower revenue-generating units. Time Warner Cable counted 12.6 million video customers at the end of the third quarter.
- Cox Communications executives must look at each other and smile during the earnings reports since the company no longer is obligated to disclose its numbers.
- Charter Communications lost 63,800 video subscribers to end the quarter with 4.7 million.
- Verizon saw its subscriber numbers increase by 204,000 to end the quarter with 3.3 million.
- Cablevision lost 24,500 video subscribers to end the quarter with 3.04 million. Cablevision also lost some digital subscribers in the quarter.
- AT&T added 236,000 subscribers to finish with 2.7 million video subscribers, but AT&T's growth could plateau since it's cutting back on its build-out plans.
- Bright House Networks also recently launched Look Back and a remote DVR service in Florida where it competes against Verizon.
With AT&T, Verizon and DirecTV adding customers, "cord cutting" isn't the main reason for cable's subscriber losses, but it is a factor, and some cable operators are starting to go on the offensive.
Perhaps a bigger concern for customers is losing access to channels during some of the nasty retransmission spats weve seen this year.
In the end, it all goes back to serving the customer, whether it's by traditional linear offerings, more VOD choices, better user interfaces or TV Everywhere-type services.