You can tell a lot about a person by watching what they do when they get into a tough class. The same dynamic applies to large telecom companies, which had been making money hand over fist for decades on distributing TV networks.
These days, of course, things are different, with not only the advanced calculus of over-the-top insurgency confounding the TV service subscriber bases of cable, satellite and telco video providers, but spiraling program costs beguiling their profit margins. In response, some companies are doubling down on video, investing in the innovation need to make the pay-TV experience better than what can be obtained with OTT.
Some operators are migrating to virtual services, sacrificing profitability in many cases to preserve their customer bases. Other companies, notably Tier 2 cable operators, are phasing out of the business that started the cable industry in the first place, opting to prioritize higher-margin residential broadband and business services segments over video. Say what you will about video service nihilism—at least it’s a strategy.
In this report we're assigning grades based the competitive responses of the leading linear pay-TV operators. Our analysis spans the top 10 cable, satellite and telco operators—AT&T, Comcast, Charter, Dish, Verizon, Cox, Altice USA, Mediacom, WideOpenWest and Cable One. We mainly looked at the last six quarters, with an emphasis on the just-completed second quarter. Our grades are based first and foremost on how pay-TV strategies have impacted cord cutting and profitability, and to a lesser extent on tangential aspects, such as bolstering other bundled services.
We'll pass out our report cards starting with the biggest pay-TV operator and ending with the smallest.