Sub count sinking at Cablevision

Mexican co. loses 154,867 viewers due to piracy, tax, sats

MEXICO CITY — Mexico’s largest cable operator, Cablevision, has said it’s lost nearly 30% of its subscription base over the past 30 months.

The publicly held cabler, majority owned by Televisa, attributes the drop to piracy, a federal cable tax and stiff competition from satellite services.

A blow to the 33-year-old concern, the decline has been astonishing — a loss of 154,867 subscribers between Dec. 31, 2001, and this past June 30, or roughly 170 per day.

“We realized that we’ve developed a strategy very focused on data and neglecting, a little, the subscriber market,” said Jean Paul Broc, the company’s CEO since February.

Although there are no official statistics, Mexico’s National Chamber of the Cable Television Industry estimates that for every 100 subscribers in Mexico, there are 35 people pirating signals. And in densely populated Mexico City, that ratio could be as high as one to one.

The Mexican cable industry recently ran a series of commercials threatening pirates with prosecution, fines and jail time, but it has evidently had little effect on the problem.

A second factor, said Cablevision, is a 10% tax levied on subscribers to cable, satellite and pay TV services since January 2002. Mexico’s president, Vicente Fox, said in June that the tax would be eliminated, but no date for that has been set.

Another problem for the cabler is competition from other providers.

Sky, which operates satellite television in Mexico, charges 299 pesos ($28) for basic service, little more than Cablevision’s 245 pesos ($23), with far more channels and better quality service.

Bad service a problem, too

A final factor, however, wasn’t discussed by Cablevision: bad service.

Mexico’s Federal Consumer Agency says that it registered 327 complaints about Cablevision service in the first quarter of this year, mostly related to billing problems, signal problems and programming changes without prior notice.

News of the dramatic subscriber falloff comes as Microsoft announced a deal with Cablevision Mexico to become the first cabler to use its set-top box software and interactive programming guide, providing digital cable to 450,000 subscribers in the next year.

Last month it was revealed that Microsoft founder Bill Gates owns a 7% stake in Televisa, which owns 51% of Cablevision Mexico.