Cable, Satellite and Telco Trends for Q3 2014

Jan Dawson Chief Analyst

(408) 744-6244 [email protected]

@jandawson

US Cable, Satellite and Telco metrics for Q3 2014

mailto:[email protected]

About this deck• This deck is provided as a public service, alongside

other data which I make available freely

• The data behind the deck is available in Excel or Numbers format as part of a paid service from Jackdaw Research

• Feel free to embed and download the deck

• Reporters may use individual slides from the deck – high resolution versions available upon request

Company coverageThe following companies and providers are included in the analysis in this deck:

• AT&T

• CableONE

• Cablevision

• CenturyLink

• Charter

• Comcast

• Consolidated Communications

• DirecTV

• DISH

• Mediacom

• Suddenlink

• Time Warner Cable

• Verizon

• WideOpenWest

These are the largest publicly traded companies across the markets covered. Together, they represent the vast majority of the market. The largest company not represented is Cox, which is privately held.

Notes• This deck focuses on three groups of companies – cable, satellite and telco – and three services: video (TV), broadband and voice

• Not all the companies included report all metrics: E.g.:

• CenturyLink doesn’t report voice subscribers

• Most of the telcos don’t directly report revenue for each service, so where these are shown, they are estimates

Contents1. Subscriber bases – installed base trends for individual

providers and groups of providers (cable, satellite, telco) and for the total market

2. Year on year growth – year-on-year net adds for individual providers and groups of providers and the total market

3. Quarterly growth – q-on-q net adds on the same basis

4. Revenues – reported and estimated revenues for selected providers, from video, broadband and voice

1. Subscriber bases

Video subscribers• Four of the five largest companies by number of video

subscribers are engaged in proposed mergers: Comcast (1st) and Time Warner Cable (4th), and AT&T (5th) and DirecTV (2nd)

• Cord-cutting doesn’t appear to be eroding subscriber numbers, which have remained remarkably stable year on year at 90 million

• It is important to note that there are strong cyclical trends in video adds, as will be shown later

1. Subscriber bases

Video subscribers

8Source: Company reporting, Jackdaw Research analysis

Video subscribers, 000s

0

5,000

10,000

15,000

20,000

25,000

30,000

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

AT&T Cable ONE Cablevision CenturyLinkCharter Comcast Cons Comms DirecTVDISH Mediacom Suddenlink TWCVerizon WoW

1. Subscriber bases

Video subscribers


Video subscribers, 000s

0

25,000

50,000

75,000

100,000

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Telco CableSatellite Total

1. Subscriber bases

Video subscribers


Total video subscribers, 000s

89,900

90,000

90,100

90,200

90,300

90,400

90,500

90,600

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

1. Subscriber bases

Video subscribers


Total video subscribers, big players, 000s

85,200

85,300

85,400

85,500

85,600

85,700

85,800

85,900

86,000

86,100

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

Note: “big players” refers to the following companies: AT&T,

Cablevision, Charter, Comcast, DirecTV, DISH, Time Warner Cable and Verizon

1. Subscriber bases

Broadband subscribers• The rankings among the set of players profiled remain

very stable, with Comcast by far the largest and AT&T consistently in second place.

• Unlike video, which is virtually stagnant, the broadband market continues to grow healthily, adding around 3 million subs in the past year

• The set of players profiled here have around 75 million subscribers between them, so fewer than there are TV subscribers, though the gap continues to narrow.

1. Subscriber bases

Broadband subscribers


Broadband subscribers, 000s

0

5,000

10,000

15,000

20,000

25,000

30,000

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

AT&T Cable ONE Cablevision CenturyLinkCharter Comcast Cons Comms DISHMediacom Suddenlink TWC VerizonWoW

1. Subscriber bases



Broadband subscribers, 000s

0

20,000

40,000

60,000

80,000

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014


1. Subscriber bases



Total broadband subscribers, 000s

70,000

71,000

72,000

73,000

74,000

75,000

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

1. Subscriber bases

Total broadband subscribers, big players, 000s

65,000

66,000

67,000

68,000

69,000

70,000

71,000

72,000

Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014





1. Subscriber bases

Voice subscribers• Voice is clearly a declining market, with the telcos suffering

the heaviest losses, but the market as a whole also contracting rapidly

• The cable companies continue to strip subscribers away from the telcos, almost exclusively as part of double- and triple-play bundles, but their gains don't offset telco losses

• The set of players profiled here now has under 50 million subscribers, and voice is by far the least adopted of the three major services

1. Subscriber bases

Voice subscribers


Voice subscribers, 000s

0

5,000

10,000

15,000

20,000

25,000

30,000

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

AT&T Cable ONE Cablevision Charter ComcastCons Comms Mediacom Suddenlink TWC VerizonWoW

1. Subscriber bases

Voice subscribers


Voice subscribers, 000s

0

15,000

30,000

45,000

60,000

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

Telco CableTotal

1. Subscriber bases

Voice subscribers


Total voice subscribers, 000s

47,000

48,000

49,000

50,000

51,000

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

1. Subscriber bases

Total voice subscribers, big players, 000s

46,000

46,500

47,000

47,500

48,000

48,500

49,000

49,500

50,000

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Voice subscribers




1. Subscriber bases

2. Year on year growth

Video growth• There are three distinct sets of companies in the video market:

• Those gaining subscribers: principally the telcos (AT&T, Verizon and on a much smaller scale CenturyLink), but also DirecTV, though its growth has slowed

• Those losing subscribers, including four large cable companies: Comcast, Cablevision, Charter and Time Warner Cable

• Those oscillating between the two, including DISH and some of the smaller regional players

• The cable players as a whole are losing about 1 million subscribers per year, while the telcos are gaining around 1.5 million and the satellite providers are growing only slightly when combined

• Year on year, the industry is adding a few hundred thousand subscribers, with the larger players making gains while the smaller ones are losing them


Video net adds


Year on year video net adds, 000s

-1,000

-750

-500

-250

0

250

500

750

1,000

1,250

1,500

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014



Video net adds


Year on year video net adds, 000s

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2,500

Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014



Video net adds



Year on year video net adds, all players, 000s

0

100

200

300

400

500

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Video net adds



Year on year video net adds, 000s, big players

0

100

200

300

400

500

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Note: “big players” refers to the following companies: AT&T, Cablevision, Charter, Comcast,

DirecTV, DISH, Time Warner Cable and Verizon

Broadband growth• Comcast is significantly outgunning all the other

players in adding broadband subscribers, further stretching its lead over the rest of the market

• AT&T has rebounded from a period of slower growth recently to re-take second place in annual growth

• All other players are adding fewer than 200k per year

• The players profiled here are adding around 2.5m/yr


Broadband net adds



Year on year broadband net adds, 000s

-200

0

200

400

600

800

1,000

1,200

1,400

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

AT&T Cable ONE Cablevision CenturyLink CharterComcast Cons Comms DISH Mediacom SuddenlinkTWC Verizon WoW

Broadband net adds



Year on year broadband net adds, 000s

0

500

1,000

1,500

2,000

2,500

3,000

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014


Broadband net adds



Year on year broadband net adds, all players, 000s

0

500

1,000

1,500

2,000

2,500

3,000

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Broadband net adds





Year on year broadband net adds, 000s, big players

0

500

1,000

1,500

2,000

2,500

3,000

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Voice growth• AT&T’s losses have been slowing slightly, perhaps

buoyed by its stronger broadband adds, while Verizon’s continue to be fairly steady at around 700k per year

• Comcast and Charter are adding subscribers at a decent rate, while the other cable companies are adding them less consistently

• The industry is losing 2-2.5 million subscribers per year, although the rate of shrinkage appears to be slowing


Voice net adds



Year on year voice net adds, 000s

-3,000

-2,500

-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014


Voice net adds



Year on year voice net adds, 000s

-3,500

-3,000

-2,500

-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

Telco CableTotal

Voice net adds



Year on year voice net adds, all players, 000s

-2,500

-2,000

-1,500

-1,000

-500

0

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Year on year voice net adds, 000s, big players

-2,500

-2,000

-1,500

-1,000

-500

0

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Voice net adds





3. Quarterly growth

Video growth• Video growth is extremely cyclical, especially for the

cable companies, with Q2 typically the worst quarter and Q1 the strongest

• However, on balance, the industry has been adding subscribers in all but the second quarter, although this past quarter saw slight shrinkage among this group

• The telcos are adding 300-400k subs per quarter, while the satellite providers see some cyclicality too

3. Quarterly growth

Video net adds


3. Quarterly growth

Quarter on quarter video net adds, 000s

-400

-200

0

200

400

600

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014


Video net adds


3. Quarterly growth

Quarter on quarter video net adds, 000s

-600

-500

-400

-300

-200

-100

0

100

200

300

400

500

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014


Video net adds


3. Quarterly growth

Quarter on quarter video net adds, all players, 000s

-300

-200

-100

0

100

200

300

400

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Quarter on quarter video net adds, 000s, big players

-300

-200

-100

0

100

200

300

400

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Video net adds




3. Quarterly growth

Broadband growth• Broadband is also highly cyclical, and again

especially for the cable companies, although the telcos see some of the same trends

• However, this group adds subscribers every quarter, even during the slow second quarter

• In the first quarter, this group adds over a million subscribers, while in the slower quarters it may be as few as two or three hundred thousand

3. Quarterly growth

Broadband net adds


3. Quarterly growth

Quarter on quarter broadband net adds, 000s

-100

0

100

200

300

400

500

600

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

AT&T Cable ONE Cablevision CenturyLink CharterComcast Cons Comms DISH Mediacom SuddenlinkTWC Verizon WoW

Broadband net adds


3. Quarterly growth

Quarter on quarter broadband net adds, 000s

-200

0

200

400

600

800

1,000

1,200

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014


Broadband net adds


3. Quarterly growth

Quarter on quarter broadband net adds, all players, 000s

0

200

400

600

800

1,000

1,200

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Quarter on quarter broadband net adds, 000s, big players

0

200

400

600

800

1,000

1,200

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Broadband net adds



Cablevision, Charter, Comcast, DirecTV, DISH, Time Warner

Cable and Verizon

3. Quarterly growth

Voice growth

• There is some cyclicality in voice growth, too, though here it is the third quarter which typically sees the greatest declines

• The cable companies in our sample add subscribers every quarter, even the slow Q3, while the telcos lose subscribers every quarter

3. Quarterly growth

Voice net adds


3. Quarterly growth

Quarter on quarter voice net adds, 000s

-700

-600

-500

-400

-300

-200

-100

0

100

200

300

400

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014


Voice net adds


3. Quarterly growth

Quarter on quarter voice net adds, 000s

-1,000

-750

-500

-250

0

250

500

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

Telco CableTotal

Voice net adds


3. Quarterly growth

Quarter on quarter broadband net adds, all players, 000s

-800

-600

-400

-200

0

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Quarter on quarter broadband net adds, 000s, big players

-800

-600

-400

-200

0

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Voice net adds




3. Quarterly growth

4. Revenues

Video revenues• Even though Comcast is the largest video provider by subs, DirecTV

has the highest video revenues, since it sells its TV services on a standalone basis and therefore doesn’t offer bundled discounts

• Our estimates for AT&T and Verizon put them in 5th and 6th place for video revenues respectively

• Combining AT&T and DirecTV would make by far the largest company by revenues, even if Comcast and Time Warner Cable also merge

• These companies generate almost $100 billion in revenue a year from their TV services, or around $1000 per subscriber per year

4. Revenues

Video revenues


3. Revenues

Video revenues, $m

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

AT&T Cablevision Charter Comcast DirecTV DISHMediacom Suddenlink TWC Verizon

4. Revenues

Video revenues


4. Revenues

Video revenues, $m

0

5,000

10,000

15,000

20,000

25,000

30,000

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

Telco CableTotal Satellite

Broadband revenues• When it comes to broadband, Comcast claims top

spot in revenues as well as subs, with AT&T, Time Warner Cable and Verizon filling out the top four spots

• Revenues are growing for all categories of players, and total revenues are over $9 billion per quarter, or almost $40 billion per year, from just the companies for which we have reported or estimated data

4. Revenues

Broadband revenues


Broadband revenues, $m

-500

0

500

1,000

1,500

2,000

2,500

3,000

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

AT&T Cablevision Charter Comcast DISHMediacom Suddenlink TWC Verizon

4. Revenues

Broadband revenues


3. Revenues

Broadband revenues, $m

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014


4. Revenues

Voice revenues• Total voice revenues for this group are now well

below $5 billion per quarter, and falling rapidly, due to both erosion of ARPUs and falling subscriber numbers

• Even though subscriber numbers are very similar between this set of telcos and this set of cable companies, there is still a significant revenue gap, with telcos generating far more revenue per subscriber from voice than the cable companies

4. Revenues

Voice revenues


3. Revenues

Voice revenues, $m

0

500

1,000

1,500

2,000

2,500

3,000

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

AT&T Cablevision Charter Comcast MediacomSuddenlink TWC Verizon

4. Revenues

Voice revenues


3. Revenues

Voice revenues, $m

0

1,000

2,000

3,000

4,000

5,000

6,000

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

Telco Cable Total

4. Revenues

Revenue per user• The data on the following slides is estimated and/or

derived from reported revenue and subscriber numbers

• It shows a huge range in average revenue per user for video, from $45-100 per month, with the satellite and telco providers generating the highest revenue per user

• Broadband revenue per user is much more clustered, around $40-50 for month, for most providers

• Voice revenue per user is declining at most providers, but most notably at Charter, where it has fallen from $40 to $20

4. Revenues

Revenue per user


3. Revenues4. Revenues

Video revenue per customer per month, $

0

20

40

60

80

100

120

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

AT&T Cablevision Charter Comcast DirecTV DISHMediacom Suddenlink TWC Verizon

Revenue per user



Broadband revenue per customer per month, $

0

10

20

30

40

50

60

70

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

AT&T Cablevision Charter Comcast DISHMediacom Suddenlink TWC Verizon

Revenue per user



Voice revenue per customer per month, $

0

5

10

15

20

25

30

35

40

Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014

AT&T Cablevision Charter ComcastMediacom Suddenlink TWC Verizon

Jan Dawson Chief Analyst

(408) 744-6244 [email protected]

@jandawson

US Cable, Satellite and Telco metrics for Q3 2014

mailto:[email protected]

Technology

Cable, Satellite and Telco Trends for Q3 2014