Bethpage, NY-based cable operator Cablevision Systems issued its Q4 05 earnings results today, showing strong growth across the board and predicting continued strong gains in 2006. But during the Q and A session of its earnings call, President Tom Rutledge said that Cablevision will soon launch its long-anticipated “network” DVR experiment. Cablevision, like Time Warner Cable before it, is interested in launching a DVR service that relies on storage capacity at the head-end rather than the device level, delivering customers greater flexibility and more choice in their DVR options.
But, despite the legality of personal DVRs, the idea of a cable-run network DVR, where the operator has a role in storing video, raises a host of copyright issues. Not, however, according to Cablevision. “We think the copyright for the network DVR is the same as the in-house DVR where the customer uses the video for their own personal use,” Rutledge said.
During Q4 05, Cablevision maintained and even accelerated its industry-topping metrics in terms of digital, high-speed and voice penetration, and has managed to post good growth in basic subscribers, something most cable operators can’t claim.
| Cablevision Systems Operational Statistics | ||
| Basic Subscribers and RGUs | 4Q04 | 4Q05 |
| Homes passed | 4,443,229 | 4,484,000 |
| Basic subscribers | 2,963,001 | 3,026,994 |
| Pro Forma annual sub growth | 0.7% | 2.2% |
| Basic penetration | 66.7% | 67.5% |
| Monthly churn | 1.9% | 1.8% |
| Customer Relationships | 3,078,172 | 3,715,335 |
| Digital Video | 4Q04 | 4Q05 |
| Digital subscribers | 1,483,024 | 1,962,500 |
| Quarterly net sub adds | 145,933 | 119,406 |
| Penetration of total basics | 50.1% | 64.8% |
| Penetration of total HP | 33.4% | 43.8% |
| Monthly churn | 2.50% | 2.2% |
| High Speed Data | 4Q04 | 4Q05 |
| Customers | 1,352,541 | 1,694,334 |
| Penetration of total homes passed | 30.4% | 37.8% |
| Monthly churn | 2.2% | 2.0% |
| IP Telephony Voice | 4Q04 | 4Q05 |
| Customers | 272,688 | 731,341 |
| Quarterly net adds | 83,497 | 130,133 |
| Residential Voice - circuit switched | 4Q04 | 4Q05 |
| Homes marketed | 157,320 | 157,320 |
| Customers | 9,412 | 7,810 |
| Penetration of total homes passed | 0.2% | 0.2% |
| Residential Voice - Total | 4Q04 | 4Q05 |
| Total Residential Telephony Subs. | 282,100 | 731,341 |
| % of homes passed | 6.3% | 16.3% |
On the high-speed front, Cablevision added 93,900 new modem subs., wrapping up the year with a total of 1.69 million high-speed customers, despite growing competition from Verizon’s fiber-based FiOs high-speed service on Long Island, the key Cablevision service territory.
During the call, Rutledge said that FiOs only overlaps 15% of Cablevision’s footprint, and that in the overlap areas, Cablevision is actually experiencing high-speed and voice penetration that is higher than the company average. If Cablevision is afraid of its telco rival, company executives aren’t showing it. “It’s a situation where they’re building a ‘me-too’ product at great expense,” Rutledge said.
The number of new VoIP customers added during the quarter topped every previous quarter’s net additions, with Cablevision adding 130,133 net new digital voice customers and ending the year with a total of 731,341 total voice customers.
For the first time ever, Cablevision generated more than $100 per basic subscriber in revenue, with average revenue for consumer services per basic subscriber of $100.46 for the quarter.
In terms of 2006, Cablevision is projecting 2% to 2.5% growth in basic subscribers and total revenue and cash flow growth in the mid-teens, consistent with 2005’s performance. From Q4 04 to Q4 05, Cablevision boosted revenue by 14%, from approximately $821 million to approximately $950 million. Cash flow advanced between the two time periods by 16%, from approximately $325 million to approximately $379 million.
Cynthia Brumfield at 2:54 PM|Comments(0)
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