As a longtime cable industry watcher, I'm amazed that U.S. cable operators are slipping perilously close to becoming the minority multichannel video provider. Although we're not there yet, the signposts are leading that way.
Case in point: Time Warner Cable, which issued its Q3 07 earnings results this morning, (PDF here) is experiencing continued loss of basic subscribers, to the point where TWC's penetration rate (basic subscribers to homes passed) now stands solidly at 50%. Which means that half of the homes in TWC's territories either buy TV service from someone else or they don't buy it all.
During the quarter, Time Warner lost 83,000 basic customers, with most of the lost subscribers, or 66,000, flowing from two recently acquired systems in Los Angeles and Dallas. During the companies earnings call, execs tried to dismiss the losses by pointing to the problems in LA and Dallas as somewhat intractable and noting that around half of the remaining lost customers are decidely marginal, i.e. those who purchase only the lowest basic service tier and not much else.
As is true of most cable operators, Time Warner is experiencing a slow-down in high-speed data and digital TV customer gains. But, Time Warner's digital voice service continued to gain steam during the quarter, a contrast to Comcast's slow-down in voice service growth. During the quarter, Time Warner added 280,000 net new voice customers during the quarter, a run-rate up 47% year-over-year and 14% sequentially.
At the end of the quarter, Time Warner Cable counted 2.7 million telephony customers, representing around 10% of all homes passed.
Cynthia Brumfield at 4:42 PM|Comments(0)
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