CABLE INDUSTRY SEES REBOUND IN PAY-TV UNITS, RESEARCH SHOWS
Cable industry saw rebound in number of pay units purchased by subscribers in 6-month period ended March 31, according to new statistics compiled by researchers of Warren Communications News’ TV & Cable Factbook. Data gathered on nation’s top 25 cable MSOs showed that number of pay units increased 419,620, up 0.83% from fall 2001, when they had dropped 1.75%. At the time, analysts had attributed drop -- which occurred in April-Sept. 31, 2001 span -- in large part to rough economic conditions, as well as immediate aftermath of Sept. 11 terrorist attacks. Pay units represent add-on channels, such as Showtime or HBO, above basic and expanded basic. Research also found that miles of plant increased 6.15% (to 78,889), largely on buildouts by Time Warner, Cox and Adelphia.
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Survey saw few changes in overall rankings of nation’s leading MSOs based on number of consumers who received at least basic service. AT&T Broadband remained nation’s No. 1 MSO with 13.75 million subscribers, despite decline of almost 496,000. Bresnan Communications announced last month (CD April 9 p14) it was buying AT&T Broadband systems serving 320,000 subscribers in Mont., Wyo. and Colo. And CEO William Schleyer recently expressed disappointment that company had lost 179,000 subscribers in first quarter (CD April 25 p9). AT&T’s broadband unit is attempting to merge with Comcast, which holds steady at No. 3 in overall ranking with gain of more than 34,000 subscribers, for total of 8.47 million. Merger, if approved by FCC and Justice Dept., would produce nation’s largest cable MSO with 22 million subscribers.
Time Warner Cable, which is part of AOL Time Warner, came in at No. 2 with basic subscribership increase of 100,000, for total of 12.8 million. Ranking came just one day after AOL TW CEO-Designate Richard Parsons acknowledged in Banc of America Telecommunications, Media & Entertainment conference that company was considering IPO for its cable TV unit. Such offering could help resolve dispute between AOL TW and AT&T over disposition of AT&T’s 25% stake in Time Warner Entertainment, which includes most of AOL TW’s cable operations. Comcast and AT&T are attempting to shed that stake, and move is seen by analysts as way of making their proposed $72 billion merger more palatable to regulators. Although U.S. Appeals Court, D.C., struck down FCC rule that blocked cable MSOs from reaching more than 30% of entire U.S. multichannel video marketplace, many in industry still see 30% as de facto cap until Commission comes up with another rule. Merged company’s 22 million subscribers would represent 34% share of 64 million subscribers served by nation’s top 25 MSOs, but that number wouldn’t butt up against 30% if viewed in context of entire multichannel video marketplace in U.S., which has 88.3 million subscribers and includes satellite subscriptions. Separately, AOL TW also is in negotiations in effort to convince Newhouse to remain in partnership with AOL TW in cable business. Newhouse family could walk away with 2 million subscribers if it decided it wanted to manage those cable systems itself.
Rounding out top 5 were Charter with 6.95 million basic subscribers, down from about 6.97 million 6 months earlier, and Cox Communications with 6.29 million, up from 6.2 million. Cox and AOL TW were among companies that had lost out in competition for AT&T Broadband. Also keeping their positions in top 10 were Adelphia, Cablevision, Mediacom, Insight and Cable One, in that order. There were 2 additions to top 25 list, both due to purchases of other systems. Overbuilder WideOpenWest (WOW) came in at No. 13 with its purchase of Ameritech New Media, with 310,000 subscribers. And General Communication Inc. was No. 25 with just more than 132,000 subscribers on its acquisition of Rogers American Cablesystems. Ameritech consequently dropped out of top 25, as did Verizon Media Ventures, which sold off some systems.
Survey showed that number of basic subscribers inched up slightly for top 25 MSOs, by 312,471 -- 0.49%. Rankings were based solely on number of subscribers taking at least basic service and didn’t take into account subscriptions to other cable services, such as high-speed cable modem service, digital tiers or cable telephony.