Time Warner Cable Posts VOD Decline27 Oct, 2011 By: Erik Gruenwedel
No. 2 cable operator reports third-quarter drop in premium channel subscribers and transactional video-on-demand movies
Time Warner Cable Oct. 27 said it lost 128,000 video subscribers during the third quarter (ended Sept. 30) as the economy and entertainment alternatives continue to undermine multichannel video distributors’ sub bases.
The No. 2 cable operator ended the quarter with 11.9 million video subscribers compared with 12 million at the end of the second quarter (ended June 30). TWC said the drop included fewer subscribers to premium channels and a decline in transactional VOD movie rentals — the first time Hollywood’s preferred rental format (over discs) has been singled out.
Indeed, transactional VOD revenue fell $7 million across both Hollywood movies and adult content, according CFO Irene Esteves. Premium channel revenue was down $12 million from Q3 last year and accounted for most of the decline.
In an analyst call, CEO Glenn Britt said declines in transactional VOD were impacted by a dearth of bigger box office hits and over-the-top video distributors such as Netflix.
“It may well be some impact from the over-the-top, so called over-the-top services … but nobody that I know has been able to measure it yet,” Britt said.
Despite the subscriber decline, video revenue remained relatively flat (down 0.5%) at $2.6 billion, due to increased revenues from equipment rental and installation charges and DVR service.
TWC reported net income of $356 million, down slightly from income of $360 million during the same period last year. Revenue increased 3.7% to $4.9 billion from $4.7 billion last year.