Time Warner Cable: Making money, losing subs, dismissing OTT and cord cutting

Jim O'NeillAnother quarter, another earnings report from cable TV land--this time Time Warner Cable--and yet another cable CEO dismissing the threat of cord cutting and over-the-top video delivery.

Time Warner Cable lost 141,000 subs in the fourth quarter, for the year, meanwhile, the MSO saw subscriber defections to the tune of 449,000. The last time it saw a bump in subscribers was 1Q2009, when it added 36,000 video customers; before that, 1Q2008, when it saw 55,000 new customers sign on. TWC blamed the usual suspects: unemployment, a flat housing market and competition from the telcos. (U-verse picked up 246,000 subs, up from 236,000 new adds in the third quarter and essentially flat compared to the 248,000 it added a year ago; it now has nearly 3 million subscribers to its IPTV service. Verizon, meanwhile, added 182,000 subscribers to its FiOS TV service in the quarter.)

Numbers from other cable operators have yet to roll in. Anybody want to wager where they'll land? I'm in for numbers that continue to trend red. The bigger question, of course, will be whether they're offset by gains on the telco side, or if the two-quarter decline in pay-TV subscriber numbers across the board continues, an unheard of three-quarter drop. The running tally so far from AT&T, Verizon and TWC shows a surplus of 287,000 subscribers, a bulge that could be eaten up by a single bad quarter from, say, Comcast.

If so, will other cable execs mirror the comments of Time Warner Cable Chairman and CEO Glenn Britt, who essentially dismissed the OTT industry as middle men who added little value to the equation? Or, who, when asked if Netflix's business model was one worth looking at said, "they have a wonderful interface, which anybody can hire a bunch of web designers and do that. I question what the ultimate value of that, what's the value add and what they're doing."

That's a question some 141,000 subscribers may have asked about Time Warner Cable in the fourth quarter before they cut the cord, either to go over the top, or simply swap to another service. -Jim

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