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Cable casts wider ‘net’

Broadband service provides MSOs room to grow

TV cord-cutting on the rise

Growth in Internet, or over-the-top viewing (OTT) may not topple multichannel distribution platforms, but at the same time, revenues of traditional distribs are not likely to see strong growth.

Despite some recent upbeat news from cable MSO’s (Comcast reduced subscriber losses from 135,000 in Q4 of 2010 to 17,000 in Q4 of 2011), there’s been little overall sub growth lately. SNL Kagan reports that total U.S. multichannel households numbered 98.5 million in 2010, up only 200,000 from the previous year, and still 100,000 below the 2008 peak.

The weak economy may be partly to blame, but the fact is that most people who want service already have it.

Even so, Moody’s Investors Service sees revenue growth for cable MSOs as they respond to rising demand for broadband service.

Right now, broadband reaches about 68% of U.S. households. “There’s definitely room for the U.S. to keep growing high-speed data penetration,” says Karen Berckmann, a Moody’s analyst who penned a report on the topic in December. “And the cable pipe is still a very good solution,” she adds. What’s more, Berckmann notes that cablers will have more pricing power as data transmission speeds are boosted.

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