Attempting to prove that size and scale are not such big factors in the cable industry, Cable One said that Charter Communications had the highest average cost per user of any MSO from 2012-2015.
Presenting to investors at an annual conference conducted by UBS on Monday, Thomas Might, CEO of Phoenix-based mid-sized operator Cable One, said Charter spent on average $57 a month on just one leg of each triple-play package it delivers.
“Economies of scale are not the only way to play the cable game,” Might said in his presentation.
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Analyzing a preconsolidated 2012-2015 period, during which Time Warner Cable, Cablevision and Suddenlink operated independently, Might found that MSOs spend an average of $51 a month for each triple-play component.
“The average triple-play had $153 of total cost in 2012-2015 before a penny of adjusted EBITDA-Capex was made,” Might noted.
According to the presentation, Mediacom had the lowest per-subscriber operating expense during the three-year period, while Cable One, Suddenlink and Comcast each came in second-lowest at $49. Cablevision and Time Warner Cable each measured out at $54 a month.
Cable One said it rendered its findings based on quarterly filings made by these publicly traded cable companies.
Providing a snapshot of the past, the slide could be labeled a bit misleading.
It requires noting that the data covers a transitional period for Charter, during which it was converting systems to digital and had not yet closed on either of its Time Warner Cable or Bright House Networks purchases.
"Between 2012 and 2015, Charter took its entire footprint all-digital and launched the Spectrum brand," Charter’s Justin Venech said in an email to FierceCable. "A lot was invested in going all digital, network improvements, and to insource and train a larger service workforce (we added 7,000 jobs at Charter during that timeframe—a 40 percent increase in legacy Charter's workforce), all focused on improving products and service and to take transactions (truck rolls and service calls) out of the business. That was the foundation for the success we are seeing today in legacy Charter and what we are doing across our larger footprint.”
Comcast, meanwhile, was also engaged in aggressive development and deployments of technologies such as the X1 video platform.
As for Cable One, it was slashing programming costs during the period, eschewing, for example, program deals with Viacom.
“We lost about half of our video subscribers,” Might conceded.