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Tag: US cable TV

  • SNL Kagan says US cable TV will be robust despite decline in video

    SNL Kagan says US cable TV will be robust despite decline in video

    MUMBAI: The naysayers have been making a cacophony of sound about the upcoming gradual squeezing out of life of the US cable TV sector. They have been citing the rampant cord-cutting, slimming down of bundles and the explosion in cheaper alternative OTT services as clear indicators that the countdown clock is ticking away.

    But long time cable TV bellwether SNL Kagan, a part of S&P Global Market Intelligence says that things are looking cheery enough for US operators. 

    A recent report by it indicates that the industry’s broadband advantage and bundling stance will enhance revenues from 2016 to 2026. The revised cable forecast incorporates a slightly improved outlook for the video segment and continued upside for the broadband services, which will translate into revenue growth.

    Kagan states that residential revenues are projected to increase from $108.38 billion in 2016 to $117.7 billion in 2026, or $9.32 billion over the 10-year interval. Contributions from commercial services will help push total industry revenue from $130.57 billion in 2016 to $140.99 billion in 2016, or $10.42 billion over the 10-year period.

    Following are some additional highlights from SNL Kagan’s 10-Year Cable Projections:

    . Subscriber Growth: Broadband subscriptions are forecast to swell by more than eight  million  over the next 10 years, reaching 71 million, and coming in at more than 1.6x the number of video subscriptions

    . Less Dramatic Decline: Basic video subscriptions are projected to drop by an annual compounded growth (CAGR) rate of 1.5% to 45.4 million by 2026, slower than the 1.7% CAGR in last year’s 10-year projection

    . Cord-Shaving Worries: Mounting anxiety around reduced spending on multi-channel video has been most evident in the advanced services. Combining basic cable and advanced services, SNL Kagan anticipates total revenues generated from residential video services to fall at a CAGR of -0.5% over the next 10 years, totally $55 billion annually in 2026

    . Advertising Strength: Despite a decline in net subscribers, net advertising revenue is expected to grow at a 4.3% CAGR through 2026 to reach $6.3 billion

    “Like many industries, cable isn’t immune to shifting preferences, but continued growth in broadband may propel revenue growth on both the residential and commercial end,” said Tony Lenoir and Ian Olgeirson, the SNL Kagan researchers behind the report. “Despite ongoing declines in video, the next 10 years look pretty good for this sector.”

  • SNL Kagan says US cable TV will be robust despite decline in video

    SNL Kagan says US cable TV will be robust despite decline in video

    MUMBAI: The naysayers have been making a cacophony of sound about the upcoming gradual squeezing out of life of the US cable TV sector. They have been citing the rampant cord-cutting, slimming down of bundles and the explosion in cheaper alternative OTT services as clear indicators that the countdown clock is ticking away.

    But long time cable TV bellwether SNL Kagan, a part of S&P Global Market Intelligence says that things are looking cheery enough for US operators. 

    A recent report by it indicates that the industry’s broadband advantage and bundling stance will enhance revenues from 2016 to 2026. The revised cable forecast incorporates a slightly improved outlook for the video segment and continued upside for the broadband services, which will translate into revenue growth.

    Kagan states that residential revenues are projected to increase from $108.38 billion in 2016 to $117.7 billion in 2026, or $9.32 billion over the 10-year interval. Contributions from commercial services will help push total industry revenue from $130.57 billion in 2016 to $140.99 billion in 2016, or $10.42 billion over the 10-year period.

    Following are some additional highlights from SNL Kagan’s 10-Year Cable Projections:

    . Subscriber Growth: Broadband subscriptions are forecast to swell by more than eight  million  over the next 10 years, reaching 71 million, and coming in at more than 1.6x the number of video subscriptions

    . Less Dramatic Decline: Basic video subscriptions are projected to drop by an annual compounded growth (CAGR) rate of 1.5% to 45.4 million by 2026, slower than the 1.7% CAGR in last year’s 10-year projection

    . Cord-Shaving Worries: Mounting anxiety around reduced spending on multi-channel video has been most evident in the advanced services. Combining basic cable and advanced services, SNL Kagan anticipates total revenues generated from residential video services to fall at a CAGR of -0.5% over the next 10 years, totally $55 billion annually in 2026

    . Advertising Strength: Despite a decline in net subscribers, net advertising revenue is expected to grow at a 4.3% CAGR through 2026 to reach $6.3 billion

    “Like many industries, cable isn’t immune to shifting preferences, but continued growth in broadband may propel revenue growth on both the residential and commercial end,” said Tony Lenoir and Ian Olgeirson, the SNL Kagan researchers behind the report. “Despite ongoing declines in video, the next 10 years look pretty good for this sector.”

  • US Cable TV Industry Report: Video Subscribers again up, Business Services revenue continues to climb

    US Cable TV Industry Report: Video Subscribers again up, Business Services revenue continues to climb

    BENGALURU: For the second consecutive quarter, three of the biggest cable TV entities in the US have reported quarter-over-quarter (q-o-q) growth in video subscribers, along with the regular increase in overall video revenue for the quarter ended 31 March 2016 (Q-16, current quarter). Q1-16 also saw year-over-year (y-o-y) growth in video revenue and subscribers. Despite the increase in video subscribers, the percentage of subscribers opting for video services vis-à-vis customer relationships has declined both y-o-y and q-o-q. Another player – Verizon reported adding 36,000 net video subscribers to its wireline Fios video services in the current quarter. Overall revenue numbers were up, with video revenue increasing along with revenues from other services and streams.

    Comcast Cable Communications segment, Time Warner Cable (TWC) and Charter Communications (Charter) are the three sample players whose numbers have been used in this paper to arrive at generalisations for the US Cable TV industry. All have three major revenue streams – Video, Internet and Voice (VIVE). Besides VIVE, other revenue streams include advertisement and ‘others’. It may be noted that Charter Communications has completed the transactions with Time Warner Cable and Bright House Networks, and soon the name of the products offered by the joined entity will be under the brand Spectrum.

    Business Services Revenue continued to grow in Q1-16. Contribution by Business Services to overall revenue also continued to grow in the current quarter while contributing to the growth of overall Average Revenue Per User (ARPU) for the players as well. Another factor that contributed to overall ARPU increase was the growth in percentage of Triple Play consumers in overall customer relationships. Broadband or High Speed internet segments of the three players reported the highest growth among the three major service streams, with Voice showing the next highest growth. Video grew the least among the three services.

    According to a US Federal Communications Commission (FCC) report, the total number of Cable TV Subscribers in the US in 2012 and 2013 were 56.4 million and 54.4 million respectively. Considering the higher value of 56.4 million, the 3 players in this paper have about two thirds of the cable TV subscribers in the US. According to industry reports, the cable providers industry in the US is highly concentrated, with the top five players generating over 96 percent of revenue.

    Comcast Inc., Cable Communications (Comcast CCS) segment is the largest player by far in the US and among the sample players; Time Warner Cable, Inc., (TWC), about half the size of Comcast’s Cable communications segment in terms of revenue and Charter Communications (Charter) with revenues that are less than half again as much as TWC’s.

    Subscription numbers, revenues

    Please refer to Figures A1 and A2 below.

    In Q1-16, the combined video subscription numbers of the three players increased 0.6 percent y-o-y to 37.574 million (74.4 percent of combined customer relationships) as compared to 37.473 million (77.8 percent of combined customer relationships) and increased 0.2 percent q-o-q from 37.490 million (76.3 percent of combined customer relationships).

    Combined customer relationships in the current quarter increased 5.1 percent y-o-y to 50.488 million as compared to 48.020 million and increased 2.8 percent q-o-q from 49.114 million.

    Combined video revenues in Q1-16 increased 3.2 percent y-o-y to $9,216 million (44 percent of combined total revenue) from $8,929 million (45.6 percent of combined total revenue) and increased 1.8 percent q-o-q from $9,058 million (44 percent of combined total revenue.

    Combined total revenue in Q1-16 increased 6.9 percent y-o-y to $20,925 million from $19.569 million and increased 1.8 percent q-o-q from $20,564 million.

    Note 1:
    (a)Residential customer relationship numbers have been used in this report wherever the breakup has been mentioned in SEC filings by the concerned entity. In the case Comcast Cable Communications segment, the breakup of subscription numbers in terms of Residential and Business Services has not been indicated.
    (b) The results and the conclusions in this report may not necessarily reflect the true trends and nature of the cable communications industry in US.

    Comcast Cable Communications (Comcast CCS)

    Comcast’s CCS segment reported 0.2 percent y-o-y growth in video subscribers at 22.4 million (80.1 percent of customer relationships) in the current as compared to 22.375 million (82.2 percent of customer relationships) in Q1-15 and a 0.1 percent q-o-q growth as compared to 22.347 million (80.7 percent of customer relationships) in Q4-15.

    Customer relationships in the current quarter increased 2.7 percent y-o-y to 27.970 million from27.234 million and increased 1 percent q-o-q from 27.701 million.

    Video revenue increased 3.9 percent y-o-y in the current quarter to $5,538 million (45.4 percent of total or consolidated revenue) from $5,331 million (46.6 percent of total revenue) and increased 2.3 percent q-o-q from $5,416 million (45.2 percent of total revenue).

    Comcast CCS reported consolidated or total revenue of $12,204 million for Q1-16, up 6.8 percent y-o-y as compared to $11,430 million and up 1.9 percent q-o-q as compared to $11,980 million.

    Time Warner Cable (TWC)

    TWC reported 0.2 percent y-o-y growth in video subscribers to 10.842 million (67.2 percent of customer relationships) in Q1-16 as compared to 10.819 million (73.5 percent of total customer relationships) and also 0.2 percent q-o-q growth as compared to 10.821 million (71.5 percent of customer relationships) in the immediate trailing quarter.

    Customer relationships in the current quarter increased 9.6 percent y-o-y to 16.130 million from 14.716 million and increased 6.6 percent q-o-q from 15.129 million.

    Video revenue increased 1.6 percent y-o-y in Q1-16 to $2,508 million (40.5 percent of total or consolidated revenue) from $2,469 million (42.7 percent of total revenue) and increased 1.6 percent q-o-q from $2,471 million (40.7 percent of total revenue).

    TWC reported consolidated revenue or total revenue of $6,191 million, up 7.2 percent y-o-y from $5,777 million and up 2 percent q-o-q from $6,072 million.

    Charter Communications (Charter)

    Charter’s video subscribers increased 4.3 percent y-o-y in Q1-16 to 4.332 million (67.8 percent of customer relationships) from 4.153 million (68.4 percent of customer relationships) and increased 0.2 percent q-o-q from 4.322 million (68.8 percent of customer relationships).

    Customer relationships in the current quarter increased 5.2 percent y-o-y to 6.388 million from 6.070 million and increased 1.7 percent q-o-q from 6.284 million.

    Video revenue increased 3.6 percent y-o-y to $1,170 million (46.2 percent of total or consolidated revenue) from $1,129 million (47.8 percent of total revenue) and increased 0.3 percent from $1,167 million (46.5 percent of total revenue) in Q4-15.

    Consolidated or total revenue in Q1-16 increased 7.1 percent y-o-y to $2,530 million from $2,352 million and increased 0.7 percent q-o-q from $2,512 million.

    Average Revenue per User (ARPU) and multi-play numbers

    ARPU has been increasing as more and more customers move from single to double play and triple play and from double play to triple play. Please refer to Figures B1 and B2 below.

    Note 2:
    ARPU in the case of Charter has been estimated based on the numbers submitted by it for its residential and business services ARPU. Charter’s ARPU numbers in the above chart are likely an approximation.

    Business Services Revenue (BSR)

    All the three players offer video, data (internet) and voice services to businesses. Unlike retail customers, the proportion of data and voice services are higher than video services. Business services revenue has been growing, as has its contribution to overall revenue. BSR’s contribution to total revenue is in double digits, in the case of TWC it was 14.3 percent in Q1-16. In the case of Comcast CCS, BSR contributed $1.3 billion to overall revenue in Q1-16. Please refer to Figures C1 and C2 below.

    Note 3:
    Business services revenue numbers may have many components including revenue from the three main service streams – video, data (high speed internet) and voice as well as revenue from advertising, wholesale transport, others, etc., depending upon the entity.

    Note:
    (a)Residential customer relationship numbers have been used in this report wherever the breakup has been mentioned in SEC filings by the concerned entity. In the case Comcast Cable Communications segment, the breakup of subscription numbers in terms of Residential and Business Services has not been indicated.
    (b) The results and the conclusions in this report may not necessarily reflect the true trends and nature of the cable communications industry in US.

  • US Cable TV Industry Report: Video Subscribers again up, Business Services revenue continues to climb

    US Cable TV Industry Report: Video Subscribers again up, Business Services revenue continues to climb

    BENGALURU: For the second consecutive quarter, three of the biggest cable TV entities in the US have reported quarter-over-quarter (q-o-q) growth in video subscribers, along with the regular increase in overall video revenue for the quarter ended 31 March 2016 (Q-16, current quarter). Q1-16 also saw year-over-year (y-o-y) growth in video revenue and subscribers. Despite the increase in video subscribers, the percentage of subscribers opting for video services vis-à-vis customer relationships has declined both y-o-y and q-o-q. Another player – Verizon reported adding 36,000 net video subscribers to its wireline Fios video services in the current quarter. Overall revenue numbers were up, with video revenue increasing along with revenues from other services and streams.

    Comcast Cable Communications segment, Time Warner Cable (TWC) and Charter Communications (Charter) are the three sample players whose numbers have been used in this paper to arrive at generalisations for the US Cable TV industry. All have three major revenue streams – Video, Internet and Voice (VIVE). Besides VIVE, other revenue streams include advertisement and ‘others’. It may be noted that Charter Communications has completed the transactions with Time Warner Cable and Bright House Networks, and soon the name of the products offered by the joined entity will be under the brand Spectrum.

    Business Services Revenue continued to grow in Q1-16. Contribution by Business Services to overall revenue also continued to grow in the current quarter while contributing to the growth of overall Average Revenue Per User (ARPU) for the players as well. Another factor that contributed to overall ARPU increase was the growth in percentage of Triple Play consumers in overall customer relationships. Broadband or High Speed internet segments of the three players reported the highest growth among the three major service streams, with Voice showing the next highest growth. Video grew the least among the three services.

    According to a US Federal Communications Commission (FCC) report, the total number of Cable TV Subscribers in the US in 2012 and 2013 were 56.4 million and 54.4 million respectively. Considering the higher value of 56.4 million, the 3 players in this paper have about two thirds of the cable TV subscribers in the US. According to industry reports, the cable providers industry in the US is highly concentrated, with the top five players generating over 96 percent of revenue.

    Comcast Inc., Cable Communications (Comcast CCS) segment is the largest player by far in the US and among the sample players; Time Warner Cable, Inc., (TWC), about half the size of Comcast’s Cable communications segment in terms of revenue and Charter Communications (Charter) with revenues that are less than half again as much as TWC’s.

    Subscription numbers, revenues

    Please refer to Figures A1 and A2 below.

    In Q1-16, the combined video subscription numbers of the three players increased 0.6 percent y-o-y to 37.574 million (74.4 percent of combined customer relationships) as compared to 37.473 million (77.8 percent of combined customer relationships) and increased 0.2 percent q-o-q from 37.490 million (76.3 percent of combined customer relationships).

    Combined customer relationships in the current quarter increased 5.1 percent y-o-y to 50.488 million as compared to 48.020 million and increased 2.8 percent q-o-q from 49.114 million.

    Combined video revenues in Q1-16 increased 3.2 percent y-o-y to $9,216 million (44 percent of combined total revenue) from $8,929 million (45.6 percent of combined total revenue) and increased 1.8 percent q-o-q from $9,058 million (44 percent of combined total revenue.

    Combined total revenue in Q1-16 increased 6.9 percent y-o-y to $20,925 million from $19.569 million and increased 1.8 percent q-o-q from $20,564 million.

    Note 1:
    (a)Residential customer relationship numbers have been used in this report wherever the breakup has been mentioned in SEC filings by the concerned entity. In the case Comcast Cable Communications segment, the breakup of subscription numbers in terms of Residential and Business Services has not been indicated.
    (b) The results and the conclusions in this report may not necessarily reflect the true trends and nature of the cable communications industry in US.

    Comcast Cable Communications (Comcast CCS)

    Comcast’s CCS segment reported 0.2 percent y-o-y growth in video subscribers at 22.4 million (80.1 percent of customer relationships) in the current as compared to 22.375 million (82.2 percent of customer relationships) in Q1-15 and a 0.1 percent q-o-q growth as compared to 22.347 million (80.7 percent of customer relationships) in Q4-15.

    Customer relationships in the current quarter increased 2.7 percent y-o-y to 27.970 million from27.234 million and increased 1 percent q-o-q from 27.701 million.

    Video revenue increased 3.9 percent y-o-y in the current quarter to $5,538 million (45.4 percent of total or consolidated revenue) from $5,331 million (46.6 percent of total revenue) and increased 2.3 percent q-o-q from $5,416 million (45.2 percent of total revenue).

    Comcast CCS reported consolidated or total revenue of $12,204 million for Q1-16, up 6.8 percent y-o-y as compared to $11,430 million and up 1.9 percent q-o-q as compared to $11,980 million.

    Time Warner Cable (TWC)

    TWC reported 0.2 percent y-o-y growth in video subscribers to 10.842 million (67.2 percent of customer relationships) in Q1-16 as compared to 10.819 million (73.5 percent of total customer relationships) and also 0.2 percent q-o-q growth as compared to 10.821 million (71.5 percent of customer relationships) in the immediate trailing quarter.

    Customer relationships in the current quarter increased 9.6 percent y-o-y to 16.130 million from 14.716 million and increased 6.6 percent q-o-q from 15.129 million.

    Video revenue increased 1.6 percent y-o-y in Q1-16 to $2,508 million (40.5 percent of total or consolidated revenue) from $2,469 million (42.7 percent of total revenue) and increased 1.6 percent q-o-q from $2,471 million (40.7 percent of total revenue).

    TWC reported consolidated revenue or total revenue of $6,191 million, up 7.2 percent y-o-y from $5,777 million and up 2 percent q-o-q from $6,072 million.

    Charter Communications (Charter)

    Charter’s video subscribers increased 4.3 percent y-o-y in Q1-16 to 4.332 million (67.8 percent of customer relationships) from 4.153 million (68.4 percent of customer relationships) and increased 0.2 percent q-o-q from 4.322 million (68.8 percent of customer relationships).

    Customer relationships in the current quarter increased 5.2 percent y-o-y to 6.388 million from 6.070 million and increased 1.7 percent q-o-q from 6.284 million.

    Video revenue increased 3.6 percent y-o-y to $1,170 million (46.2 percent of total or consolidated revenue) from $1,129 million (47.8 percent of total revenue) and increased 0.3 percent from $1,167 million (46.5 percent of total revenue) in Q4-15.

    Consolidated or total revenue in Q1-16 increased 7.1 percent y-o-y to $2,530 million from $2,352 million and increased 0.7 percent q-o-q from $2,512 million.

    Average Revenue per User (ARPU) and multi-play numbers

    ARPU has been increasing as more and more customers move from single to double play and triple play and from double play to triple play. Please refer to Figures B1 and B2 below.

    Note 2:
    ARPU in the case of Charter has been estimated based on the numbers submitted by it for its residential and business services ARPU. Charter’s ARPU numbers in the above chart are likely an approximation.

    Business Services Revenue (BSR)

    All the three players offer video, data (internet) and voice services to businesses. Unlike retail customers, the proportion of data and voice services are higher than video services. Business services revenue has been growing, as has its contribution to overall revenue. BSR’s contribution to total revenue is in double digits, in the case of TWC it was 14.3 percent in Q1-16. In the case of Comcast CCS, BSR contributed $1.3 billion to overall revenue in Q1-16. Please refer to Figures C1 and C2 below.

    Note 3:
    Business services revenue numbers may have many components including revenue from the three main service streams – video, data (high speed internet) and voice as well as revenue from advertising, wholesale transport, others, etc., depending upon the entity.

    Note:
    (a)Residential customer relationship numbers have been used in this report wherever the breakup has been mentioned in SEC filings by the concerned entity. In the case Comcast Cable Communications segment, the breakup of subscription numbers in terms of Residential and Business Services has not been indicated.
    (b) The results and the conclusions in this report may not necessarily reflect the true trends and nature of the cable communications industry in US.

  • US cable TV reduces subscriber losses in 2014

    US cable TV reduces subscriber losses in 2014

    MUMBAI: For fans of delivery of video services via cable TV, there’s some news to cheer about rom the US. Apparently, the top nine cable TV operators in the US shed 1.195 million net video subscribers in 2014. While that may seem like a high number, it is actually a drastic reduction over the loss of 1.695 million subscribers in 2013. 

    It seems as if cable TV has managed to hold its ground in 2014 as compared to 2013 as it still accounts for 49.3 million subscribers in 2014. In fact according to the Leichtman Research Group which put out these numbers, this has been the best year for cable TV since 2008.

    The net additions by other providers seem to be slowing down too. Telco TV service providers such as AT&T and Verizon added 1.05 million net video subscribers in 2014. As compared to that the gains in 2013 were 1.43 million in 2013.

     

    The Telcos account for 11.6 million video subscribers in 2014.  The satellite TV providers such as Direct TV and Dish added only 20,000 net video subscribers as compared to 170,000 net adds in 2013.

    Overall the pay TV sector saw more than 125,000 net video subscribers opting to cut the cord in 2014 as compared to 95,000 in 2013, the Leichtman Research Group said. Its study covered the top 13 pay TV operators which account for 95.2 million subscribers. 

    The fact that the existing video service providers have managed to stem their losses goes against the predictions of cable TV and pay TV service naysayers who have been stating that OTT services such as Netflix and Hulu will eat away at traditional modes of video delivery. The pay TV industry apparently will continue to be dominant provider of video to subscribers, says Leichtman.

    The study comes at a time when fears are running rife amongst Indian cable TV operators about how Reliance Jio’s launch will impact their business in the next few years.