Who’s afraid of over-the-top video?

Cable TV For all the hype about “cord-cutting” and over-the-top video delivery they don’t seem to be impacting incumbent pay-TV providers’ bottom lines, at least not yet. Yesterday, Time Warner Cable posted a 8.2% rise in 2nd quarter earnings, driven by solid earnings growth. Last week, rival Comcast also beat the Street on the top line for the 2nd quarter, although it saw a slight dip in earnings due to costs associated with its planned merger with NBC.

This morning, Cablevision posted a sharp drop in earnings for the quarter due to some write-downs but reported solid growth in top-line revenue and subscribers. DBS provider DirecTV, meanwhile, reported a rompin’-stompin’ 33% jump in earnings thanks to a 5.7% increase in ARPU.

That’s a pretty impressive run for the sector in a down economy.

Granted, some of the MSOs’ growth is coming from non-video services like broadband and voice. But in terms of their vulnerability to disruption by new video entrants it really doesn’t matter. Bundling services simply means the MSOs are grabbing an even larger share of a household’s telecommunications dollar and raises the cost of switching for any one service.

Further reading:

Comcast’s Solid Numbers Merit Your Attention

Cable Boosts Time Warner’s Q2

Comcast: Online Video Isn’t a Competitive Threat

Leave a Reply

Your email address will not be published. Required fields are marked *