Posts for 'Cable TV Operators'

According to industry data compiled by Leichtman Research Group, cord-cutting remained relatively modest in Q3 ’16, with the top 11 pay-TV operators, which account for approximately 95% of the market, losing 255K subscribers vs. 210K lost in Q3 ’15. As has been the trend in recent quarters, cable operators performed better than satellite and telco operators, which are disprorportionately bearing the brunt of the overall market’s slow, but ongoing, contraction.

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Comcast announced on Friday that the integration of Netflix into its X1 set-top box would launch this week. But when I checked my X1 on Friday evening it was already available, so I spent some time over the weekend giving it a test drive. Below is a 12-minute demo video I created that highlights the key benefits of the integration and how expertly it was done.

As VideoNuze readers know, I’ve had the X1 since its debut, back in July, 2012. I was immediately enthusiastic about its clean and highly responsive web-like UI as well as its ability to quickly retrieve on-demand content. More recently, the voice-powered remote control has delivered even more value. But the biggest potential benefit I’ve always envisioned for X1 was its ability to handle IP apps, giving Comcast a breakthrough way to provide a seamless experience between its own video services and those delivered over-the-top via broadband (e.g. Netflix, Amazon, YouTube, etc.).

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New research from consulting firm Altman Vilandrie & Company highlights the major challenges that current and pending “skinny bundles” face. Skinny bundles - which are scaled down, customized and less expensive groups of TV networks - have become a hot industry topic, and are perceived as valuable in pulling cord-cutters and cord-nevers back into the pay-TV ecosystem.

But AV&Co.’s 7th annual consumer video survey, which is the most extensive research that I’ve seen yet into the prospects for skinny bundles, paints a picture of how narrow the opportunity may in fact be. VideoNuze readers know that I’ve been very skeptical of skinny bundles, whether from Sling TV, PlayStation Vue or soon Hulu and DirecTV Now. The AV&Co. research largely confirms my concerns (see here and here).

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Music services are omnipresent, but pay-TV operators haven’t had much of a role. Seeking to change that, data provider Gracenote, a subsidiary of Tribune Media Company, has announced a suite of music data and services to enable pay-TV operators to launch their own music video channels and services, identify music on TV and search for artists’ on linear and on-demand programming.

Noting that 72% of YouTube viewership is music videos (according to Statista), Gracenote believes pay-TV operators have an opportunity to launch various services that bring music videos to HDTVs and home media environments.

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Major pay-TV operators made it through another quarter without any substantial acceleration in cord-cutting, according to industry data tallied by analysts MoffettNathanson. In Q2 ’16, pay-TV operators lost an estimated 757K subscribers, compared with a loss of 683K subscribers in Q2 ’15. Note also that the second quarter is always the seasonally weakest. When estimated Sling TV subscribers are added in, the loss declines to 708K in Q2 ’16 vs. 613K lost in Q2 ’15.

In a continuing trend, cable operators again picked up market share at the expense of telcos and satellite providers. Cable’s loss in Q2 ’16 declined to 242K subscribers from 404K lost in Q2 ’15, while telcos swung from a gain of 5K subscribers in Q2 ’15 to a loss of 526K subscribers in Q2 ’15. AT&T accounted for the vast majority of that loss (minus 391K) as it transitioned U-Verse subscribers to DirecTV. Verizon had a loss 41K vs. a gain of 26K a year earlier as it experienced an employee work stoppage.

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Comcast reported its Q2 ’16 earnings this morning, once again showing strong improvement in video subscribers and keeping cord-cutting in check. The second quarter is always seasonally slow in the pay-TV business, but Comcast reduced its video subscriber loss to just 4K in Q2 ’16, its best performance in over 10 years. The trend in just the past 4 years is impressive; Comcast has steadily reduced its subscriber loss from minus 69K in Q2 ’15, minus 144K in Q2 ’14 and minus 162K in Q2 ’13.

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I'm pleased to present the 330th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

Colin and I were both very enthusiastic about news earlier this week that Comcast will integrate Netflix into its X1 set-top box, a move we’ve been advocating for a while. In this week’s podcast we discuss how complicated this negotiation must have been, and why joint subscribers will be the big winners.

Surely a motivating factor for Comcast was the acknowledgment that viewers are spending more time on SVOD, which new research from IBM Cloud Video highlighted this week.

More specifically, the research showed how important video has become for Amazon Prime members, with 75% of them now watching. By not charging for video in Prime, Amazon is potentially a big disruptor in the video/TV industry down the road.

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Yesterday, Recode reported that Comcast will integrate Netflix into its X1 set-top box. Loyal VideoNuze readers know that I’ve been advocating for this type of partnership for almost two years, back to when I articulated the benefits in “Why the Timing is Now Perfect for a Netflix-Comcast Partner Deal” in October, 2014. There are lots of benefits to Comcast and Netflix by partnering (as I’ll further explain below), but the biggest winners once the integration is complete later this year, are the companies’ mutual viewers.

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I'm pleased to present the 323rd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

Colin and I were both very impressed by the demo that Comcast CEO Brian Roberts did at INTX earlier this week of how the X1 set-top box will blend linear TV and online video streams from this summer’s Rio Olympics into one experience.

We both believe this will be a truly breakthrough viewer experience, showcasing X1’s broadband capabilities and the value of the two-way interactive network. We envision Comcast launching a massive marketing campaign in the months leading up to the Olympics highlighting how experiencing the Olympics will be “best on X1,” in turn driving new subscriber acquisitions and upgrades.

More broadly, we discuss how valuable X1 and Comcast’s back-end infrastructure are as a platform for launching new features and services. We touch on how Amazon too is leveraging its platform for its Streaming Partners Program, underscoring the anticipated competition between big video platform owners. The role of a robust platform in determining the ultimate video winners is becoming increasingly clear.

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(Note: Comcast Wholesale is a VideoNuze sponsor)

After a long and arduous regulatory review, earlier this week Charter Communications closed on its $55 billion acquisition of Time Warner Cable and its $10.4 billion acquisition of Bright House Networks. Following the closings, Charter plans to phase out the Time Warner Cable and Bright House brands, re-branding its entire new footprint Charter, with service name Spectrum.

Many TWC subscribers will gladly bid adieu to a brand that has had one of the worst rankings, as measured by the American Customer Satisfaction Index, in an industry that itself endures rock bottom scores. Of course, simply changing a company’s name isn’t sufficient to effect real change; rather, it’s the underlying service that must tangibly improve, a point that Charter CEO Tom Rutledge clearly stated in this interview with Bloomberg.

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I'm pleased to present the 320th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

As both Colin and I wrote this week (here and here), Comcast delivered very strong video and broadband subscriber gains in Q1 '16. Despite all of the rhetoric around cord-cutting and the fact that SVOD services - which were considered a potential substitute for pay-TV - have boomed, Comcast had its best first quarter in 9 years, adding 53K video subscribers vs. a loss of 8K subscribers in Q1 ’15.

As Colin and I discuss on the podcast, Comcast is benefitting from weakening competition, its own investments in product/content/user experience, and triple-play bundling, powered by broadband adoption. As has been the case for a couple of years now, the X1 set-top box, now in 35% of video subscribers’ homes, continues to be the linchpin in video, driving up ARPU, VOD and DVR usage, reducing churn, etc. In an era of rising viewer expectations, X1 delivers a superb, differentiated, web-like experience.

Given all of the above, I think Comcast has a strong outlook at least through 2016 if not beyond. Colin is a little less sanguine and we discuss our differences.  

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Comcast is on an epic roll. Despite years(!) of cord-cutting warnings by the blogosphere and analysts, Comcast once again proved the naysayers wrong, adding 53K video subscribers in Q1 ’16. It was the best first quarter in 9 years for the company and easily eclipsed the loss of 8K subscribers in Q1 ’15.

The Q1 gain builds on the strong year Comcast recorded in 2015, losing just 36K subscribers vs. a loss of 194K in 2014. Remarkably, Comcast now has 25K more video subscribers that it did one year ago (22,400K vs. 22,375K).

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The never-ending tussle between pay-TV operators and sports TV networks over escalating carriage fees is back in focus due to the standoff between Comcast and the YES Network, which has the rights to broadcast New York Yankees games, among others. Comcast dropped YES last November, leaving approximately 900K of its New York area subscribers without access to YES. With the Yankees’ opening day one week from today, the standoff is going to gain much more attention.

As with other sports TV carriage disputes, this one boils down to money and audience. Comcast is arguing that YES’s demand for a reported $6 per month per subscriber isn’t justified given its ratings. Last November Comcast said that over 90% of its subscribers didn’t watch the equivalent of even one quarter of the 130 games YES broadcast in 2015. Nielsen said that YES averaged 250K viewers in 2015, a decrease of 44% vs. its peak of 450K in 2007.

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Cord-cutting remains one of the industry most-talked about themes, but it still appears relatively muted. According to Leichtman Research Group’s calculations, the 13 biggest pay-TV operators, which account for about 95% of the industry, lost approximately 385K subscribers in 2015. While that’s up from a 150K loss in ’14 and 100K loss in ’13, it still represents a minuscule .4% subscriber contraction, hardly the free fall many observers have long been predicting.

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I'm pleased to present the 309th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

First up this week we discuss Comcast’s robust Q4 ’15 earnings results. Despite all of the talk of cord-cutting, Comcast had its best year for video subscribers in 8 years, improving its loss to just 39K. In addition, both Charter and Time Warner Cable actually reported video subscriber gains for 2015.

Once again, Comcast cited its X1 next-gen set-top box as the key driver of success. Colin and I have talked about X1’s value in the past, and it’s clearly a game-changer for the company.

Ironically, Comcast’s success with X1 is happening even as FCC Chairman Tom Wheeler is calling for a new technology mandate on the pay-TV industry to give access to third-party set-tops. Colin and I discuss why we think market forces are a superior choice to government intervention.

Last, we’ll both be watching the Super Bowl this weekend, which will be a milestone in allowing cord-cutters and cord-nevers to stream for free to connected TV devices.
 
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I'm pleased to present the 306th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

This week Colin and I share our top predictions for the video industry in 2016. We also look back at our predictions for 2015 and rate how we did (how’s that for accountability?).

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Cord-cutting accelerated in 2015. Once again, It dominated headlines about the pay-TV industry, portending its imminent demise, as SVOD awareness and original content investments skyrocketed. But despite all of that, top Wall Street analyst Craig Moffett of MoffettNathanson (who has participated in many VideoNuze events) issued a bullish note this morning on cable TV operators’ prospects in 2016.

Craig’s analysis highlights the subtleties of the pay-TV industry’s dynamics that are too often glossed over in generic media coverage about cord-cutting’s ascent. The nub of his argument is that while the overall pay-TV industry is indeed pressured in many ways, cable operators’ distinct product and technology advantages vs. its primary competitors (satellite and telcos) have led to cable operators taking market share, helping insulate them from macro issues.

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New research from Interactive Broadband Consulting Group (IBB) suggests that pay-TV subscribers may actually be more fertile targets for adding SVOD services than non-pay-TV subscribers. IBB found that 31% of current pay-TV subscribers plan to add an SVOD service over the next 6 months, vs. 21% for non-pay-TV subscribers.

The data supports the theory that heavier TV watchers seek more great TV to watch (and therefore are more prone to subscribe to SVOD services which are offering a ton of originals) than lighter watchers. That’s not to say there isn’t also a segment of what I’ve called “entertainment-only’s” who will resist paying for the multichannel bundle which is anchored by expensive sports networks.

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Perhaps the biggest question weighing on the pay-TV ecosystem these days is whether younger viewers who have acclimated themselves to a strictly SVOD diet will eventually become pay-TV subscribers or whether they’ll remain “cord-nevers.”

The traditional narrative is that as younger viewers settle down, buy a house, make more money and have kids they’ll end up subscribing to pay-TV just like their parents did. With the booming array of inexpensive OTT substitutes, that expectation has become feeling ever more tenuous.

But a new survey of 1,111 U.S. 18+ year-olds by Clearleap seems to suggest the narrative still has legs, with 91.3% of those over 30 years-old saying they either currently or previously subscribed to pay-TV. That’s a big jump from the 73.5% of 18-29 year-olds that said they have subscribed at some point, which means 26.5% of the age cohort are technically “cord-nevers.” 64.4% of 18-29 year-olds say they currently subscribe to pay-TV while the subscription rate for all respondents to pay-TV was 78.9%.

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