Time Warner Cable Drops 306,000 TV Subs, In Part Because of CBS Blackout

MSO cuts full-year revenue growth forecast after subscriber losses

The monthlong CBS blackout for Time Warner Cable customers in major markets was a key factor leading to the cable operator’s biggest quarterly loss of video subscribers in its history.

The cable company lost 306,000 residential TV subscribers in the third quarter, much higher than analyst expectations of a decline of 183,000, according to StreetAccount. TW Cable also dropped 24,000 high-speed data and 128,000 voice subscribers on the consumer side, as the cable operator incurred higher-than-expected losses across all three services.

With the subscriber losses, Time Warner Cable revised its revenue forecast for the full year. The MSO now expects full-year revenue to grow 3% to 3.5%, down from its previous forecast of 4% to 5%, CFO Arthur Minson said on the operator’s earnings call.

“The CBS dispute apparently took a much larger toll than anyone would have imagined, and this colored all of the results,” MoffettNathanson analyst Craig Moffett wrote in a research note. “That’s bad news for future programming negotiations, and not just for TWC. Every cable operator now goes to the table knowing that CBS not only won the war, but left TWC badly damaged even for having fought the fight.”

TW Cable president Rob Marcus, set to become CEO at the start of 2014 after Glenn Britt retires, said the programming dispute with CBS as well as a smaller one with Milwaukee-based Journal Broadcast Group elevated video disconnects in the quarter by a few percentage points, and resulted in a 10% increase in double- and triple-play customers dropping video.

While the programming spats “resulted in short-term pain for us… in the end, the deals we reached were still better than where we were,” Marcus said on the earnings call Thursday.

As leverage continues to tip on programmers’ favor over pay-TV distributors, cable mogul John Malone has assertively called for consolidation among operators to cut content costs and gain other synergies. Malone’s Liberty Media holds a 27% stake in Charter Communications, which has sought a merger with Time Warner Cable — but the larger operator has rebuffed those overtures.

Britt, speaking on his last earnings call ahead of his retirement, addressed the issue of consolidation, though he didn’t mention Charter or Liberty: “We are focused on making money for (shareholders), rather than just on some fuzzy notion of industry consolidation,” he said.

Bright spot for TW Cable during Q3 was business services, which grew revenue 20.5% to $594 million. Total revenue for the quarter was $5.52 billion, up 2.9%, and adjusted net income rose 11.6% to $489 million (excluding gains from its sale of SpectrumCo and Clearwire investments last year).

In the CBS fight, more than 3 million TW Cable customers lost access to CBS-owned stations in New York, L.A., Dallas and other markets, and the cable operator dropped Showtime and three other cable nets across the U.S. The networks went off the air Aug. 2; the companies announced an agreement resolving the standoff on Sept. 2.

Time Warner Cable also in the third quarter had an extended retransmission-consent fight with Journal Broadcast Group, affecting TV stations in Milwaukee, Wis., Green Bay/Appleton, Wis., Omaha, Neb., and Palm Springs, Calif. The companies reached a deal after a 58-day blackout.

The cable company said in announcing Q3 results that “subscriber activity in the quarter was negatively impacted by programming disputes with CBS and Journal Communications.”

TW Cable, the second-biggest U.S. cable operator after Comcast, had 11.41 million video, 11.05 million broadband and 4.81 million voice residential customers. The operator added 14,000 business services customers, with 606,000 customer relationships at the end of June.

More TV

  • 'The Bachelor' Recap: Finding Love Among

    'The Bachelor' Recap: Finding Love Among Hometown Dates

    SPOILER ALERT: Do not read if you have not yet watched the eighth episode of Season 24 of “The Bachelor.” For the first glimpse of the real world in weeks, titular bachelor Peter Weber took his women back home. With only four women remaining — Hannah Ann Sluss, Kelsey Weier, Madison Prewett and Victoria Fuller — [...]

  • Drew Carey Price Is Right

    'Price Is Right' Tapings Delayed After Drew Carey's Ex-Fiance Killed

    “The Price Is Right” tapings have been postponed following news that host Drew Carey’s ex-fiance was killed last week. Family and sex therapist Amie Harwick, 38, was found Saturday morning at her home in Los Angeles with injuries consistent with a fall. She later died at the hospital. Her ex-boyfriend Gareth Pursehouse has been arrested [...]

  • Caroline Flack

    'Love Island' Returns to Air As ITV Defends Treatment of Caroline Flack

    ‘Love Island’ was back on air Monday for the first time since the death of former host Caroline Flack on Feb. 15. Amid the reality series’ return, broadcaster ITV insists it supported the star after she was removed from the show. Monday night’s episode began somberly with narrator Iain Stirling providing voiceover over scenes of [...]

  • Tiffany BooneEntertainment Weekly Pre-SAG Party, Arrivals,

    Actor Tiffany Boone Addresses Her Decision to Quit 'The Chi'

    Actor Tiffany Boone addressed her exit from “The Chi,” the Showtime series she departed in November 2018 after making harassment allegations against her former co-star Jason Mitchell. Mitchell was fired from the show last May as a result of intimidation and abuse accusations made by Boone and showrunner Ayanna Floyd Davis. Mitchell was subsequently dismissed [...]

  • Amazon Prime nabs ‘Russian Affairs’ for

    Amazon Prime Nabs ‘Russian Affairs’ for Germany, France and the Netherlands

    Amazon Prime Video has acquired the first season of series “Russian Affairs” for distribution in Germany, France and the Netherlands, from Russia’s Start Studios. The eight-part drama that follows the lives of Russia’s elite and those who aspire to that position is set in contemporary Moscow. Under the title “Gold Diggers,” the series was broadcast [...]

  • MODEL RELEASED Mother with baby, 1

    Channel 4 Orders ‘Baby Surgeons’ From Wonderhood Studios

    U.K. broadcaster Channel 4 has commissioned Wonderhood Studios for a documentary series with the working title “Baby Surgeons.” The series will explore the journeys parents go through to save their babies during complex pregnancies and will feature cutting-edge baby surgeries, some performed inside the womb. It will also use CGI, MRI and Ultrasound to enhance [...]

More From Our Brands

Access exclusive content