August 6, 2010

Cable, Satellite Companies Report Positive Second Quarter

Cable and satellite companies recently reported second quarter results that reveal consumers are more confident about spending on small luxuries like premium cable and pay-per-view.

Time Warner Cable Inc., DirecTV Inc. and Cablevision Systems Corp. all show a healthy demand for their pricier digital cable packages.  They also raised rates, which boosted profits.

The subscription TV business has not seen much of a downturn, even as other industries struggled during the economic recession.

DirecTV gained the most video subscribers of the three, growing 100,000 stronger during the quarter.  Cablevision added 2,900 more subscribers.

Time Warner Cable lost 111,000 video customers in the quarter, as people switched their cable TV subscription for satellite deals.  Comcast Corp saw the same trend last week when it reported its earnings.

However, Time Warner kept more consumers signed up for pricier digital cable packages.  The company's customers paid an average of $72.56 per month for video in the quarter, up 5.2 percent from the prior year.

DirecTV and Cablevision also said customers paid more per month on average because of price increases and stepped-up orders for pay-per-view, digital TV, HD and digital video recorders.

DirecTV says it is positive it will continue to grow in its U.S. and Latin America businesses.

Advertising revenue also increased 24 percent to $216 million at Time Warner Cable, mostly due to more spending by automotive companies and political groups.  Cablevision's AMC, IFC and WeTV cable channels saw an 18 percent jump in ad revenue, and DirecTV also said ad revenue rose.