OTT outpacing AT&T, Verizon and cable subscriber gains

jimo

If you're keeping score (and who isn't?) the first three earnings reports of the quarter have telcos in the lead--once again--in terms of video subscribers added. There's still a long way to go, but here's how it's shaping up so far:

Verizon (NYSE: VZ), said it added 194,000 new subs to its FiOS TV service, ending the year with 4.2 million subscribers. During the earnings call, the company said customers were likely to see higher subscription rates in 2012.

Of course, Verizon, as detailed in the Wall Street Journal, could see its FiOS subscriber numbers slip in coming quarters as it faces new competition in the space- -from itself. Verizon Wireless stores in several markets this month began pitching services from Comcast (Nasdaq: CMCSA), as part of the deal with the devil, er, joint marketing deal with Comcast and several cable companies, it made for spectrum. You have to wonder what Verizon Wireless' marketing folks were thinking when they, as the WSJ points out, crowed about Comcast having the "fastest Internet service in the nation," on a webpage at the same time Verizon was crowing about how FiOS "beats every other cable provider in speed reliability."

Perhaps we'll see yet another lawsuit arguing about Internet speed, a la Cablevision (NYSE: CVC) and Verizon, only this time between Verizon and Verizon Wireless. But, I digress.

The nation's second-largest IPTV player, AT&T (NYSE: T), meanwhile, added 208,000 customers to its U-verse TV service, leaving it with 3.8 million customers who are, almost to a one (actually more than 90 percent) also using the telco's high-speed Internet as well. Of course, many of them are keeping at least one eye peeled to see when the other shoe will drop and the dreaded usage caps that the company has talked about for months actually will go into effect.

On the flip side (meaning leaking customers like my drive leaks to the right on every tee shot), was Time Warner Cable (NYSE: TWC). The nation's second-biggest cable company saw 129,000 of its 12.1 million video customers take a hike, most, probably, headed to Verizon or AT&T which overlap between 12 percent and 25 percent of TWC's territory (and in some areas actually offer MSG Network, which TWC hasn't had since Dec. 31 because of a retransmission fee brouhaha). The 1 percent loss isn't really that big a deal for the quarter--as in, it's better than the 155,000 the company lost in the previous quarter--but, like an intermittent slice, it's not a healthy thing to have happening.

There are a slew of earnings reports yet to come in, but the reality is that telcos are likely to see some additional gains and cable are not.

In a case of apple to oranges, meanwhile, both Hulu and Netflix (Nasdaq: NFLX) reported substantial subscriber gains. Hulu now says it has more than 1.5 million subscribers to its premium service, Hulu Plus. Netflix, meanwhile, which has had more struggles than Job in the past half of the year, gained 610,000 overall subscribers in the U.S. for the quarter, about 220,000 of them streaming only customers.

From a subscriber number only perspective, OTT is winning... but this course plays long.--Jim

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