Cable One's pay-TV retrenchment continues, loses 25K subs in Q4

The steady decline of Cable One's pay-TV business continued in the fourth quarter, with the MSO hemorrhaging another 25,000 video subscribers.

Until it is spun off later this year, Phoenix, Ariz.-based Cable One is still owned by Graham Holdings, which reported fourth-quarter earnings Friday, Feb. 20. Cable One has now seen its video subscriber base shrink from nearly 539,000 at the end of 2013 to just over 451,00 at the close of 2014.

Cuts to programming have hurt Cable One's churn and revenue growth, but helped profitability.

The MSO's cable revenue fell 1 percent to $197.7 million for the fourth quarter and 1 percent for the full 2014 at $798.1 million.

Cable One operating income grew by 4 percent in Q4 to $50.7 million. For the full year, the unit's operating income expanded by 5 percent to $178.7 million.

High-speed data customers increased by 2,300 to 488,454 in the fourth quarter. Residential high-speed data revenue increased 5.3 percent in 2014 

Cable One has willingly let major programming networks walk away in an effort to trim programming costs. Most notably, the MSO chose not to renew its carriage deal with Viacom in April 2014.

With degrading programming options and no major investment in user experience--Cable One's Southern and Midwestern customers don't exactly have the equivalent of the Xfinity X1 platform in their living rooms--the subscriber base has suffered.

"The cable division continues its focus on higher margin businesses, namely high-speed data and business sales," reads a Graham Holdings statement that included the now perfunctory language about the video business not mattering anymore.

The statement added, "Due to rapidly rising programming costs and shrinking margins, video sales now have less value and emphasis (video PSUs were down 16 percent from 2013) and programming costs have been reduced significantly."

For more:

- read the earnings release
- read this Multichannel News story

Earnings summary: Sizing up pay-TV earnings for the fourth quarter of 2014

Related links:
Cable One has lost 18% of video subs since Viacom blackout, analyst says
Viacom gives Dauman another raise amid Dish blackout fears, falling stock price
Cable companies push back on spiraling program costs
Viacom misplays its renewal negotiations with Suddenlink
Sony unveils pay-TV service PlayStation Vue... sans ESPN

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