Suddenlink loses 29,400 subscribers in Q2, calls losing Viacom a diminishing factor

Suddenlink Communications continues to lose basic video subscribers after failing to renew its contract with a major programming conglomerate, Viacom, late last year.

The St. Louis-based MSO reported a second-quarter loss of 29,400 basic video customers, up from 19,000 for the same period last year. The carrier ended the period with around 1.1 million total cable customers.

The company said its programming costs were down significantly year over year. Among several factors, this is the result, Suddenlink said, of no longer having to pay licensing fees to Viacom. It is also the result of having to pay licensing fees for fewer subscribers. Suddenlink has lost 70,600 basic video subscribers since opting not to renew its deal with Viacom.

Suddenlink also said seasonal issues -- such as customers turning off their cable service while they left their homes for the summer -- impacted the company's video business.

"We replaced the Viacom programming with the programming -- we didn't just drop it, we added other channels, some of which are very valuable with our customers," said Suddenlink CEO Jerry Kent. "The bulk of the headwinds are behind us. There's minimal lasting impact [from losing the channels]. It certainly affects the connect side of the business. But if you compare the cost of putting Viacom back on versus the customers we'd save if we did, it's night and day. There's no doubt we made the right call."

Kent said Viacom is still messaging Suddenlink customers via social media, reminding them that their missing out on channels including Comedy Central, Spike TV, MTV and Nickelodeon. 

"We've moved on," Kent said. "Evidently, Viacom has not."

Suddenlink, which is waiting for regulatory approval before it is taken over by European telecom Altice SA in a $9.1 billion deal, reported a second-quarter net loss of $303.6 million. The company lost $2.4 million in the same period of 2014.

Suddenlink executives would not comment on the pending Altice takeover. 

For more:
- see this Suddenlink release

Special Report: Pay-TV earnings reports in Q2 2015

Related articles:
Altice may be eyeing Verizon's wireline business as next acquisition target
France's Altice buys controlling stake in Suddenlink for $9.1B, sets up possible TWC run
Cable analysts: Altice's Drahi will target Cablevision, Cox, Mediacom

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