Entries in CATV Video Penetration (3)


Video Subs Fall Across the Board for Cablecos

3Q11 Connections: CATV Video Subs and Homes Passed

In 3Q11, publicly traded cable companies across the board reported losses of television customers, giving up ground to the ILECs, and potentially losing subs to OTT providers, as consumers are getting their video fix elsewhere. Collectively, the cablecos in our sample shed 422k video subs in the quarter, and YoY they have trimmed 2.5% off of their video customer base.

The cable giants have the most video subs to lose, and it follows that they took the biggest hit in 3Q11—Comcast (Nasdaq:CMCSA) and Time Warner (NYSE:TWC) lost 165k and 126k television subs, respectively.  Charter (Nasdaq:CHTR) actually closed on a pair of acquisitions in 3Q11 that netted it around 25k video subs, but it still reported a net loss of 42k video customers for the quarter.

Knology (Nasdaq:KNOL), Suddenlink and Cablevision (NYSE:CVC) were the only cablecos that posted video gains YoY, but in all cases the growth was not organic. Knology picked video subs through its acquisition of CoBridge’s cable systems in 2Q11, and Suddenlink added 82k basic cable subs with its 2Q11 purchase of NPG Cable. Meanwhile, Cablevision’s YoY customer increase was fueled by its 4Q10 acquisition of systems from Bresnan Cable.

With the decline in video subs came a corresponding drop in penetration of homes passed. The publicly traded cablecos only penetrated 43.5% of home passed with basic video services in 3Q11, compared to 45.3% as of 3Q10. At the high end, Alaskan cable provider GCI reported penetration of 61.1% while Charter’s penetration continued to lag behind the competition with 36.6% penetration in 3Q11.


2Q11 Connections: CATV Video Subs and Homes Passed

CATV Video Penetration of Homes Passed Falls to 44%

Publicly-traded cable companies combined to shed 469k video connections in 2Q11, as all but two cablecos in our sample reported video customer losses in the quarter. In addition to facing competition from satellite and telcos for video market share, over-the-top video options such as Hulu and Netflix have no doubt chewed into the customer base of cablecos. Over the past year cable companies have lost nearly 1.3m video connections, an overall decline of 2.7%.

The two largest providers, Comcast (Nasdaq:CMCSA) and Time Warner (NYSE:TWC) accounted for 77% of the connection losses in 2Q11—around 360k subs. Charter’s (Nasdaq:CHTR) connections however declined the most on percentage basis, as it lost 6.4% of its video customers YoY.

Acquisitions have fueled the only video sub gains reported by cable companies in recent quarters, including Cablevision’s (NYSE:CVC) 271k video adds in 4Q10, and both Knology’s (Nasdaq:KNOL) and Suddelink’s customer growth in 2Q11. Knology added video subs through its acquisition of CoBridge’s cable systems in 2Q11, while Suddenlink added 82k basic cable subs with its 2Q11 purchase of NPG cable. This trend promises to continue in the rest of 2011 as well, with Charter having closed on a pair of deals in 3Q11 and Time Warner’s purchase of Insight set to close later this year.

Despite the video connection losses, the cable companies increased their number of homes passed by 54k in 2Q11. The decline of video penetration of these homes however continued in the second quarter, falling to 44% on a weighted average basis. Penetration has fallen in every quarter for the cablecos since 2Q09. Alaskan-based GCI (Nasdaq:GNCMA) continued to report the highest video penetration of homes passed at 61.6%, while Knology posted the lowest penetration at 24.2%.  


1Q11 Connections: CATV Video Subs and Homes Passed

Cable Video Penetration Slides Again

With the exception of Cablevision’s (NYSE:CVC) acquisition-fueled gains in the fourth quarter of last year, every cable company in our sample has seen its video subscriber base fall or (at best) languish over the past year.  In that time, the group has lost nearly 1.6m video connections as both ILECs and satellite competitors steal market share.  1Q11’s losses were nearly 400k; although if you adjust Cablevision’s results for its Bresnan acquisition, the first quarter losses were actually less than in 4Q10. On a percentage basis, Charter Communications (Nasdaq:CHTR) has declined the most (-11.4% YoY), although Charter has been involved in a number of deals—both buying and selling—which skews its results. 

Undaunted, the cable companies increased their homes passed in the first quarter by more than 150k homes; that combined with falling customer counts leads to even lower penetration—at the end of 1Q11, cable’s penetration of homes passed had fallen to 44.2% on a weighted average basis.