Cable One said it lost around 21,400 pay-TV customers in the second quarter, its first quarterly report as an independent company.
Perhaps more importantly for the Phoenix, Ariz.-based MSO, however, were the modest 505 residential broadband users it picked up during the period. Cable One is actively touting its transition away from video services and toward Internet access services, noting in its earning release today that data from both residential and business Internet services now accounts for 47.5 percent of its total revenue, up from 41.4 percent a year ago.
"Non-video customers" grew from 30 percent to 40 percent of total subscribers, the company also said. Residential data revenue was $74.5 million, up 12.7 percent year over year.
Total revenue for the period was down 1.2 percent to $202.7 million.
In April 2014, Cable One became the biggest MSO to date to drop Viacom networks (the move was later followed by Suddenlink). The company's video customer base has been steadily declining since then -- it's down to 385,136 from 475,987 at the end of June 2014.
Cable One executives have been aggressively steering the company's priorities away from what they have said are the high programming costs -- and low margins -- associated with video services. Instead, they hope to prop up the company's revenues with a focus on selling faster and more expensive Internet access.
"When a company's core strategy is to de-emphasize video, one can't be too surprised when video subscriber losses are disappointingly high," said MoffettNathanson analyst Craig Moffett in a note to investors today. Analysts had been expecting Cable One to report video sub losses of around 16,000.
Moffett pointed out that Cable One's gain of just 505 broadband customers is an impressive uptick from the 3,170 Internet customers the company lost in the second quarter of 2014. However, as Moffett said, "The majors are growing broadband much faster. If broadband success turns out to be more tightly tethered to video than Cable One currently believes, their whole strategy will be called into question."
Cable One executives will conduct their second quarter conference call with investment analysts on Thursday at 11 a.m. EST. The MSO spun off from Graham Holdings on July 1.
- read this Cable One earnings release (PDF)
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Article updated August 21 to correct subscriber data.