Is it time to rechristen the U.S. cable TV industry as
high-speed data industry? Cable MSOs (multi service operators),
which offers triple-play video, data and voice services, have been
so far relying on video/TV offerings for future growth. However,
with the deployment of next-generation DOCSIS 3.0 technology, cable
TV operators have extensively penetrated into the broadband
(high-speed data) market.
According to a recent report by the Leichtman Research Group
Inc. (LRG), the top nine cable TV operators accounted for a total
of 49.915 million broadband subscribers as against 49.91 million
video subscribers, at the end of second-quarter 2014. For the
first-time in the 65-year long history of the cable TV Industry,
broadband customer count surpassed the TV viewers count.
LRG further reported that there were approximately 85.9 million
high-speed data subscribers at the end of the last quarter. Out of
this, cable MSOs command around 50.7 million customers (59%) and
the remaining 35.2 million (41%) customers belong to telecom
Over the last six years, the internal dynamics of the U.S.
pay-TV industry have been gradually shifting from cable TV
offerings toward fiber-based video services of large telecom
Moreover, the strong presence of online video streaming
providers is posing significant threat to the existing pay-TV
business model. Video offering, the core business area of the cable
TV operators, seems to be slipping out of their hands.
At this juncture, a strong growing momentum in the high-speed
data market by the cable MSOs bodes well for the future. Leading
cable TV operators including Comcast Corp. (
), Time Warner Cable Inc. (
), Charter Communications Inc. (
) and Cablevision Systems Corp. (
) are increasingly emphasizing on the broadband market. On the
other hand, telecom giants, such as Verizon Communications Inc. (
) and AT&T Inc. (
) continue to lose DSL subscribers.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
CABLEVISION SYS (CVC): Free Stock Analysis
COMCAST CORP A (CMCSA): Free Stock Analysis
CHARTER COMM-A (CHTR): Free Stock Analysis
TIME WARNER CAB (TWC): Free Stock Analysis
AT&T INC (T): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
To read this article on Zacks.com click here.