Michelle Clancy ©RapidTVNews | 28-07-2011
Time Warner Cable has beaten analyst expectations with a 22.8% uptick in profit for the second quarter, but continued to suffer the cable churn malaise. The No. 2 U.S. cableco saw 130,000 residential video subscribers walk away during the period.
That's a larger decline year over year, when it lost 111,000 subs. Not surprisingly, VOD and premium cable revenues went down as well. Execs said during the earnings conference call that it's a trend that has continued into the third quarter, unfortunately.
During the earnings call, executives blamed the sluggish U.S. economy and fierce competition from satellite and IPTV (AT&T's U-verse, Verizon FiOS and DirecTV in particular). That's a line the cable industry has maintained through several straight quarters of sub drains. As usual, there was no mention of online video cord-cutting as a result of Netflix and other Internet players.
Many see cable in a make-or-break situation as satellite and IPTV continue to innovate and run attractive promotions. In all, cablecos lost 2.02 million video subscribers in 2010, up 32% from the 1.53 million customers they shed in 2009 according to Citigroup. There are signs however that the bleeding might be slowing a bit, with Comcast and TWC both reporting losing fewer customers YOY for 2011 so far.
Despite the video results, TWC CEO Glenn Britt said the company "continued to perform well" in the latest quarter. On the bright side, the MSO added 54,000 residential broadband customers and 32,000 telephony subscribers. Q2 earnings rose from $342 million to $420 million, off a revenue increase to $4.9 billion.