Cable MSO Dynamics Tilt Toward Broadband Services - Analyst Blog

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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 operators.

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 operators.

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. ( CMCSA ), Time Warner Cable Inc. ( TWC ), Charter Communications Inc. ( CHTR ) and Cablevision Systems Corp. ( CVC ) are increasingly emphasizing on the broadband market. On the other hand, telecom giants, such as Verizon Communications Inc. ( VZ ) and AT&T Inc. ( T ) continue to lose DSL subscribers.

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CABLEVISION SYS (CVC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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