The most interesting part of the company’s report is its subscriber numbers. Video subscriber totals fell by 306,000, from 11.72 million in the second quarter of this year to 11.41 million. High-speed data subscribers fell by 24,000, from 11.07 million to 11.05 million, and voice subscribers fell from 4.93 million to 4.81 million. The combined total subscriber number fell by 131,000, from 14.6 million to 14.47 million. The company blames the declines on its disputes with CBS Corp. (NYSE: CBS) and Journal Communications. Time Warner said its dispute with CBS cost it approximately $15 million in credit issued to subscribers for the temporary loss of the Showtime in some markets.
Comcast Corp. (NASDAQ: CMCSA) reported on Wednesday that it lost 129,000 cable video customers in the quarter and picked up 297,000 high-speed Internet subscribers and 169,000 voice customers.
Subscriber losses, particularly video subscribers, are a significant problem for cable carriers, along with higher retransmission fees charged by programmers like CBS. So far, the cable guys have not come up with a good response. Unless they do, subscriber losses could get worse as customers “cut the cord” in favor of broadband program delivery. Broadband does not have the variety and wide choice available to cable subscribers, but the costs are significantly lower and the content choices are apparently satisfactory.
Time Warner shares were up about 1% in premarket trading Thursday, at $118.00 in a 52-week range of $84.57 to $120.93. The consensus target price for the shares was around $125.60 before this report.
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