Despite what have been largely positive quarterly earnings reports, the major programming conglomerates have had their worst week on Wall Street since last August, when Disney's confirmation of ESPN subscriber losses sent investors into a cord-cutting panic.
Indeed, shares for Disney, 21st Century Fox, Time Warner Inc. and Viacom are all down this week -- even though Disney said that ESPN is not hemorrhaging customers anymore. This time around, the anxiety seems to center not so much on a mass exodus from the pay-TV ecosystem, but rather operators pairing down programming packages into so-called skinny bundles.
Cable operators have reported solid video subscriber numbers. Fourth-quarter performances were the best in a decade for Comcast (NASDAQ: CMCSA), Time Warner Cable (NYSE: TWC) and Charter Communications (NASDAQ: CHTR).
All three operators say the majority of their additions are for traditionally robust programming packages. But MSOs like Comcast are also giving out contradictory messages, noting the improved "segmenting" of their video customer base.
Comcast won't disclose how many of its video customer additions are for new, skinny IP-only products like Xfinity on Campus or Xfinity Stream, but it's rolling customer additions for these services into the total aggregate figure for video subscribers.
Meanwhile, Verizon said that its Custom TV package, which gives users a base package of around 40 channels and lets them add additional networks incrementally, is now its fastest growing FiOS package.
Despite a good quarter from cable operators' video businesses, "the overall pay-TV ecosystem is still losing subscribers," said Paul Sweeney, an analyst at Bloomberg Intelligence, to AdAge. "In an environment where there is cord-cutting and skinny bundles, that means fewer subscribers for many networks like ESPN."
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