Morgan Keegan & Co. Inc. released its year-end wrapup of the MSOs, and how they did on VOD and digital cable. The upshot: This is the year for VOD, M-K says.
Digital cable, though, will stay flat or show moderate growth, with potential to ramp up in the second half.
The research firm pulled numbers from the fourth-quarter and year-end results for the major MSOs, except Adelphia, which hasn't yet released that information.
Numbers did include AOL Time Warner, AT&T Broadband, Cablevision, Charter Communications, Comcast Corp. and Cox Communications, although some cablecos revealed more information than others, skewing comparisons.
AOL Time Warner led in FY 2001 new digital cable subs, with 471,000 added. That's a 35 percent sequential improvement and a 2 percent year-over-year decline, Morgan Keegan says.
AT&T Broadband added 335,000 new digital subs for the year, a 30 percent sequential upgrade and an 8 percent year-over-year increase.
Cablevision just launched its iO digital cable service in September, and by year's end, had 17,200 digital subs. The company plans huge rollouts in the second half of 2002, aiming for 125,000 subs by the end of the year. Unlike its competitors, the company offers Sony set-top boxes, rather than Motorola's or Scientific-Atlanta's.
Charter Communications' digital sub growth slowed to 193,600 new subs, sequentially by 47 percent and 53 percent year-over-year. Its digital sub base grew 82 percent over 2000, however, with a final total of 2.2 million subs. The company aims to add up to 600,000 new digital customers in 2002.
Comcast added 815,000 digital subs for the year, for a final total of 2.4 million digital customers. It plans to add up to 700,000 in 2002, or up to 175,000 per quarter, which, M-K says, is down 20 percent from year-over-year additions.
Cox's digital sub growth was flat, with 158,000 new subs, as were sequential and year-over-year growth. The cableco did add more subs during the second half, for a year-end total of 1.4 million digital subscribers. It also sees slower digital subscription growth in the next year.
Despite the optimistic outlook for VOD, neither AOLTW nor AT&T Broadband gave specifics on plans. AOLTW has said it plans to deploy VOD in all major markets by the end of this year, M-K says. AT&T BB "has not made significant progress on the VOD front except in two markets inherited from MediaOne." The research firm adds that AT&TBB could work with Comcast, with which it may merge this year, to make a plan and start deployment steps during the first half of the year, with a "more aggressive rampup after the deal closes."
Cablevision's subscribers already have VOD available, M-K says; with VOD, SVOD and 600 titles. "Given the company's plan for a complete digital transition, we expect an aggressive VOD buildout this year," particularly with Cablevision's goal of 2 million digital capable homes by year's end.
Charter has deployed VOD in 11 markets, and about 500,000 digital subs could get it as of the end of 2001. It plans launches in 17 more markets this year, with availability to digital subs expected to double this year.
Comcast's VOD deployments topped its guidance, when it ended the year with more than 3 million VOD-ready homes. It plans to double that during the year.
Cox has deployed VOD in Hampton Roads, Va., and in San Diego and Phoenix. It plans to have the service available in seven markets by third quarter.
M-K concluded that 2002 will see "significant progress toward gaining critical mass" in VOD while digital cable will stay flat or grow slightly.