Cable operators see broadband pulling away from video

5 August 2015 by Steve Blum
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Charter Communications is gaining broadband subscribers, while Suddenlink is losing them. Both companies are shedding television customers, although Suddenlink is dropping them at a much faster rate. That’s the top line from the companies’ financial reports for the second quarter of this year.

On the whole, Charter reported a net gain, with pickups in broadband and voice accounts more than compensating for the declining video subscription numbers. It ended the quarter with about 5 million broadband and 4.1 million televisions subs, a gain of 70,000 and a loss of 33,000 respectively. The gain of 33,000 in voice subscriptions neatly offset the video loss, leaving an overall gain of 70,000 billable services. Net out customers with multiple subscriptions, and Charter serves 6 million homes out of about 13 million passed.

Suddenlink’s drop – down 29,000 video and 3,000 broadband subs – appears to be mostly due to the breakdown in negotiations with Viacom, which means that it’s not offering networks such as MTV, Comedy Central or Nickelodeon. According to a story in FierceCable, Suddenlink CEO Jerry Kent thinks the damage is done and the result is more benefit than harm. As he put it…

It certainly affects the connect side of the business. But if you compare the cost of putting Viacom back on versus the customers we’d save if we did, it’s night and day. There’s no doubt we made the right call.

Both companies are significant players in California, and both are in the middle of major transactions, with a European operator, Altice, buying a controlling share of Suddenlink and Charter trying to acquire Time Waner and Bright House. Charter execs were upbeat about the prospect of getting regulatory approval; Suddenlink’s managers wouldn’t discuss it.