Time Warner Cable Posts First Annual Positive Video Sub Growth in 10 Years28 Jan, 2016 By: Erik Gruenwedel
CEO calls regulatory process for cabler’s merger with Charter ‘exceedingly tedious’
Time Warner Cable Jan. 28 reported 32,000 net video subscriber additions for the fourth quarter (ended Dec. 31, 2015) — the No. 2 cabler’s first yearly gain since 2006. TWC, which is in the midst of regulatory proceedings regarding its acquisition by Charter Communications, gained 54,000 net video subs since the end of Q3. It ended the year with 10.8 million video subs. The cabler has lost 1 million video subs over the past five years.
At the same time, video revenue declined $95 million to $9.9 billion year-over-year due to a decline in average video subscribers (lower programming tier revenue), partially offset by an increase in average revenue per subscriber. The latter primarily the result of growth in video equipment rental and premium network revenue and higher transactional video-on-demand revenue (including the May 2015 Mayweather vs. Pacquiao fight).
“Our subscriber improvement over the last eight quarters, including our record [broadband] subscriber performance in 2015, has begun to show up in our financial results,” CEO Rob Marcus said in a statement.
Meanwhile, the Federal Communications Commission is on day 124 of its 180-day “shot clock” in the regulatory review of the Charter/TWC merger — a process that could take longer as regulators deal with various opposition groups, in addition to state agencies.
The $55 billion deal is nearing approval in California, where the state’s public utility commission Jan. 27 fielded opposition questioning the merger’s impact on market concentration and low-income households.
"We remain hopeful that the approval process in California can be accelerated,” Marcus said on the company's fiscal call.
MoffettNathanson’s Craig Moffett believes the chances of the merger failing have diminished significantly.
“We’re raising our odds of approval to 90%, from 80% previously,” he wrote in a note.