Telco TV subscriber growth in the U.S. for the most part slowed during the fourth quarter of 2009, but the spigot did remain open and customers continued to pour through, presumably draining the reservoirs of the traditional cable TV operators. While that was the case to some extent--Comcast, Time Warner Cable and Cablevision Systems all continued to lose basic video customers--the cable TV players continued to do fairly well.
Comcast, TWC and Cablevision all reported mostly positive fourth quarter and year-end earnings results, managing to counter video subscriber losses with telephony subscriber gains and broadband Internet growth, as well as increases in subscribers to overall triple play packages. Triple play metrics will become very important in the quarters to come, as telcos to some degree are letting some of their telephony customers leave through the front door, as they are placing bigger bets that they can grow their TV market leverage and maintain at least a respectable penetration with their own triple play packages in the markets where they do offer video.
Telco-cable competition mostly has been a market trade--video customers in exchange for telephony customers, and vice versa. If cable TV players can continue to hang tough during these last days of recession (or last days before our double dip, whatever the case may be), they may be able to gain more traction in the next phase of this competitive war, which will be all about triple play competition. One way they can do that is by continuing to innovate--expanding DOCSIS 3.0, offering services like Cablevision's coming RS-DVR. Another way is by owning more TV programming, as Comcast is looking to do with NBC Universal.
What could slow cable TV's current momentum? At least two possibilities: If cable TV leaders raise prices for some services (broadband Internet being the most likely target), and/or if they institute broadband Internet usage caps before customers are ready for them.
The telco-cable war is now entering its second decade of meaningful battle (or, its third decade, if you count the rhetoric and positioning that ultimately didn't amount to much in the 1990s). It's poised to become more heated than ever, which also makes it a great time to launch a new Fierce site and newsletter dedicated to delving deeper into the cable TV sector. Our sister publication FierceCable, headed up by veteran cable scribe and cynical wit Jim Barthold, launched this week. Be sure to check it out, and stay tuned to both FierceIPTV and FierceCable for the latest developments in this ongoing competitive war.