Smaller cable companies may see more unpaid service bills, credit agency warns

Credit card and money
Some cable customers may not be able to pay their bills. (utah778/Getty Images)

Nearly 28% of National Cable Television Cooperative member companies’ customers have “deep subprime” credit rankings, meaning they fall into the lowest 12% of the consumer population.

So said Massillon, Ohio-based SubscriberWise, a credit reporting agency, in a release touting just how economically challenged some NCTC operator subscribers may be.

“This revelation is a tough pill to swallow,” said David Howe, SubscriberWise founder and president, in the statement.


Like this story? Subscribe to FierceVideo!

The Video industry is an ever-changing world where big ideas come along daily. Cable, Media and Entertainment, Telco, and Tech companies rely on FierceVideo for the latest news, trends, and analysis on video creation and distribution, OTT delivery technologies, content licensing, and advertising strategies. Sign up today to get news and updates delivered to your inbox and read on the go.

SubscriberWise says 27.78% of NCTC operator customers have Fair Isaac Corporation credit scores (FICO) in the “Level 7” and “Level 8” range. According to SubscriberWise, this indicates a high risk of these subscribers not being able to pay their cable bill over a two-year contract.

“In other words, these are consumers who are in a financial crisis and—despite the best intention to pay as agreed—these individuals will disproportionately fail to meet their obligations as evidenced by the deep subprime scores calculated from extremely adverse credit reports that contain substantial and serious delinquency,” Howe said.

Howe says the analysis is important “because from a risk and selling standpoint, the deep subprime consumer represents more than the hundreds of dollars of potential write-off from unpaid programming and unreturned equipment.

“Unfortunately, it’s also a data-driven fact that prospects who originate in the very bottom rungs of the adult credit consuming population, they correlate significantly with high negative churn, statistically higher rates of fraud and predatory behavior, increased burdens on the call center, and other high-risk scenarios that translate into disproportionate revenue losses and operational inefficiencies across the entire MSO,” he added.

Howe said the data isn’t an indictment of economically disadvantaged customers. It’s an opportunity, he explained, to make a “proactive, not reactive” decision.

Editor's Note: A previous version of this story included wording and an image that did not accurately characterize individuals with low credit scores or the analysis offered by SubscriberWise.

Suggested Articles

As more subscription streaming video services enter the market, the potential total cost for consumers keeps going up.

Amazon’s new Fire TV Blaster is built to work in tandem with other Amazon devices to expand Alexa voice controls within the home.

beIN Sports is launching a free, ad-supported network on the Roku Channel, where it will feature live sports including soccer along with originals.