The second-quarter earnings season has wrapped up for the top publicly traded pay TV operators in the U.S., and it's time to break down the numbers. FierceVideo has put together an overview of how the top cable, satellite and telco pay TV operators performed.
How the top six U.S. publicly traded pay TV operators performed in the second quarter in video (ranking by subscribers.)
|Operators||Video subscribers (mil.)||Net additions (thousands)|
|4. Dish Network*||11.27||(96)|
|6. Altice USA||3.10||(35)|
*AT&T's totals include U-verse, DirecTV, AT&T TV and AT&T TV Now; and Dish's include Sling TV.
Charter’s surprise quarter
In the age of consistent cord cutting across cable, satellite and telecom, Charter did the almost unthinkable during the second quarter when it added a (relatively modest) 102,000 residential video subscribers. The cable operator brought in a whopping 850,000 new residential and SMB high-speed internet customers and admitted that, when broadband grows that fast, it’s bound to help other service categories grow.
“The ratio of video customers to overall customers, it is continuing to decline, but if you grow faster than that rate of decline, then you create video growth,” said Charter CEO Tom Rutledge during his company’s most recent earnings call. “That’s really what’s happened here… It’s that simple.”
Charter’s positive swing didn’t do much to offset pay TV declines as a whole; even after factoring in Charter’s growth, the top six operators still lost nearly 1.5 million subscribers combined. However, while Charter’s return to video subscriber growth may be a one-off, the operator has been doing better than most. MoffettNathanson said that Charter’s video subscriber base shrunk by less than 1% year over year, “a remarkable feat given that the industry decline rate will likely reach 8% this quarter.”
A Dish-DirecTV merger in a month?
Dish Network Chairman Charlie Ergen has developed a habit of predicting the “inevitable” merger of Dish and DirecTV, its primary satellite TV competitor. However, before last week’s earnings call, he never presented a hypothetical timeline for such a deal.
“Is it one month from now or two years from now? I don’t know,” Ergen said.
Industry analyst Craig Moffett didn’t discuss how soon a Dish-DirecTV merger could potentially happen in a recent research note, but he did point to some interesting factors that could influence such a deal. He said that Congress is likely to pump a lot of funding into infrastructure to help stimulate the economy, which will help connect many underserved Americans with broadband and could shrink Dish Network’s reliable rural video subscriber base by widening the addressable market for OTT services.
“Ironically, bringing broadband to more of rural America might actually make it easier to get regulatory approval for a Dish/DirecTV merger; recall that the biggest impediment to a merger in 2002 was the 2:1 nature of the combination in rural markets,” wrote Moffett. “But it would make a merger that much harder to finance. Without the defensible rural segment to fall back to, there would be no floor, and no future, for satellite TV.”