Now that Vonage has weighed in with its Q2 07 subscriber statistics, there can be no doubt: Comcast, the nation’s number one cable operator, is now the nation’s number one VoIP provider. Although Comcast edged out pioneering Vonage at the end of Q1 07, it did so only by a hair — as of 3/31/07 Comcast’s Digital Voice service laid claim to 2.426 customers while Vonage counted 2.39 million customers.
As of June 30, 2007, however, Comcast clearly vaulted over Vonage, serving 3.1 million Digital Voice customers, in comparison to Vonage’s 2.45 million subscribers. Time Warner is hot on the heels of Vonage, though.
At the end of Q2 07, Time Warner had 2.34 million VoIP customers. Cablevision is a distant fourth in VoIP customer rankings, with 1.4 million VoIP subscribers, although Cablevision’s footprint is only one-fifth that of Time Warner’s.
Presumably privately held cable company Cox tops Cablevision, but Cox only releases total telephony customer counts — 2.2 million at the end of Q2 07 — and a good chunk of those customers are served by traditional circuit-switched technology.
Posted by Cynthia Brumfield at 9:44 PM | Print | Comments (0)
DBS is a competitively difficult medium for multichannel video services because the satellite providers can’t offer companion bundled high-speed and voice services the way rival telco and cable operators can. But you wouldn’t guess that DBS is handicapped based on DirecTV’s Q2 07 earnings report. Revenues, cash flow and net customer gains were relatively decent during the quarter, although profits dropped on higher operating expenses.
U.S. revenues rose 6% year-over-year to $3.7 billion, while cash flow grew 9% to $1.1 billion. Profits were $448 million, or 37 cents per share, down from $459 million, or 36 cents per share, a year ago.
Subscriber gains continued at seasonally normal levels, something of a surprise given that cable operators have recently reported unexpected reversals, or surprise slow-downs, in basic customer gains. During the quarter, DirecTV added 128,000 net new customers, up 2.4% over Q2 06 net subcriber gains.
Acquisition costs, always a touchy variable for DBS providers, were up 7% year-over-year, while revenue per customer also grew by 7% as more customers purchased “advanced” services such as HD packages or set-tops with DVR capability. DirecTV is clearly banking on HD and DVR to fuel revenue growth momentum.
During the earnings call, company executives said that around 40% of the total 16.3 million subscriber base are purchasing HD or DVR add-ons and that the number of customers upgrading to HD DVRs is up more than four-fold year-over-year. Moreover, DirecTV is gearing up to launch 100 nationally available HD channels, which the DBS provider thinks will help it “leap-frog” over the cable competition.
CEO Chase Carey sounded optimistic about the company’s competitive position. “There’s no question that it’s an increasingly competitive marketplace but we feel really good about where we’re positioned,” he said. It helps that DirecTV has partnerships with the incumbent telcos, including Verizon and AT&T (through the former BellSouth territories).
About 25% of the new customers that DirecTV garnered during the quarter came from these telcos, Carey said.
Carey also put the kibosh on the notion that a slow-down in the construction of new homes has hurt DirecTV’s business, an idea that some analysts have been floating. The “slow-down in home starts is not something you can track to…it’s for us a dynamic on the margin,” meaning that DirecTV didn’t notice any particular impact by the cooling in housing growth.
Posted by Cynthia Brumfield at 2:12 PM | Print | Comments (0)
Troubled VoIP pioneer Vonage issued its Q2 07 earnings report this morning showing decent revenue growth and a remarkable reduction in net losses. But, the trouble surrounding Vonage’s patent lawsuit defeat combined with strong triple-play service bundles resulted in a steep drop-off in net new customer gains for the quarter.
Revenues rose 44% year-over-year and 5% sequentially to $205.9 million. Net loss dropped by 55% year-over-year and 54% sequentially to $33.6 million.
It’s too bad, however, that customers steered clear of the voice competitor. During the quarter, Vonage added only 56,691 net new customers, a run-rate down 78% from the 255,936 net new lines added during Q2 06, and down 66% from the 165,646 net new adds during Q1 07.
During the company’s earnings call, interim CEO Jeffrey Citron said that “we know the negative press [surrounding the patent litigation with Verizon] that came out in April and May had two big impacts on the business.” The first, of course, was to scare people away from becoming new Vonage customers. The second was to speed up the rate at which customers churned away from the service.
Citron also said that Vonage has “substantially” completed its work-around to the Verizon patents, as they have been construed by the court. But, the company is also confident in the strength of its appeal of the patent decision, he added.
Looking ahead, Vonage hopes to bolster its competitive standing against cable operators and phone companies partnering with broadband service providers to sell bundled high-speed and VoIP services. Citron said that trials are under way with selected providers and Vonage hopes to expand the nascent efforts to a larger footprint
Posted by Cynthia Brumfield at 1:37 PM | Print | Comments (0)
The New York Times’ Brad Stone (the intrepid reporter who uncovered Fake Steve Jobs, btw) has this piece today about the joint venture between NBC-U and News Corp. to create an online video destination and syndication business and the amazing $100 million investment stake it raised from Providence Equity Partners.
Judging from the first paragraph in the article, Brad, like the rest of us, is obviously skeptical about the venture, called simply “New Site” because after six months it still has no name.
The joint venture between NBC Universal and the News Corporation to bring their television shows and movies onto the Internet still lacks a Web site. It still has no name. It also has yet to announce a clear mission that persuades the large number of skeptical observers that real-world rivals can cooperate online.
And yet..and yet..”New Site” has been able to raise a mound of money from a blue chip investor. The $100 million reflects a 10% stake in the venture, which means that “New Site” is worth $1 billion according to somebody’s calcuations. Todd Dagres, general partner at Spark Capital, is quoted in the article as calling the valuation “startingly rich,” particularly given that there isn’t likely to be a sell-out or IPO given the studio parentage.
Well, that’s probably an understatement, and this latest development only puts even more intense pressure on the joint venture to succeed.
Posted by Cynthia Brumfield at 9:39 AM | Print | Comments (0)
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