Comcast (NASDAQ: CMCSA), Time Warner Cable (NYSE: TWC) and Charter Communications (NASDAQ: CHTR) collectively added 89,000 video subscribers in the first quarter, but the return to pay-TV growth appears to be confined to the top.
All of the mid-sized operators reported losses in the quarter, including Cablevision (down 15,000), Cable One (off 13,000 residential subs) and Mediacom (minus 2,000 across its two operating units).
It's unclear how small operators performed — SNL Kagan's comprehensive tally for the first quarter hasn't been released yet, and first-quarter figures for Suddenlink Communications aren't yet available. But the trend lines appear ominous.
Speaking to FierceCable, Cable One CEO Thomas Might said his MSO does not have plans to ditch the video business entirely. But referring to the economic theory "tragedy of the commons," it didn't sound like the cable company has plans to aggressively battle against OTT competition.
"Once one programmer started taking double-digit rate increases, even in the face of falling ratings, each of the other programming groups felt compelled to do the same," Might said. "The reason the theory is named 'tragedy' is because it is guaranteed to end badly for all in the long run. It appears that long run is finally arriving."
"The lower end of the market can no longer afford the big bundle; the number of disruptive OTT technologies and vendors are now multiplying rapidly; and the millennial generation has very limited interest in traditional TV viewing," Might added. "These patterns will inevitably bring an end to the ubiquitous fat bundle, but only slowly and painfully."
Special report: Tracking pay-TV earnings in Q1 2016
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Thomas Might on Cable One's transformation and how much time it has left in the video business