First quarter numbers are now in for many of the main US pay TV operators with DirecTV reporting this week another big quarter compared to Dish.
Dish Network had first quarter revenues of $2.8 billion up 7.5% with net income of $259 million up from $157 million but added just 35,000 net new subscribers taking its numbers to 13.8 million.
By comparison DirecTV had a 17% hike in revenues to $4.6 billion, only a 10% hike in net income to $371 million, but put on 275,000 net new subscribes taking the company to 17 million, as its ARPU went up 8.6% and churn fell yet again to 1.36% per month across the quarter.
DirecTV parent Liberty Media said that it anticipates net subscriber additions of 1.5 million to 2 million over the next three years which are far more modest, hinting that perhaps DirecTV is big enough, and needs to emulate cable and simply make more money out of each home.
This was the second quarter when Dish was unable to match DirecTV for subscriber growth. Last quarter it made 85,000 additions compared 275,000. However in that quarter it’s net income was also down, so it has tamed that particular beast. Last quarter was blamed on its poor showing in HD offerings, and since, it has consistently promised that despite failing to correctly place in orbit its last satellite, that its HD offerings would roll out as planned for the rest of this year, and this week added that another 22 national HD channels had been put in place.
Are the cable operators doing as well? Charter Communications, produced a first quarter revenue of $1.5 billion up 10.5%, but this was driven not by new TV customers but by increases in phone and Internet revenues. ARPU for the quarter rose a huge 13.4% over last year to just over $100, driven mostly by bundling.
All cable operators talk in terms of RGU additions, not net adds, because usually they don’t add new customer homes, just new services, and in a bundled environment, these can be a little misleading. Charter said it added 302,300 RGUs during the quarter to reach 5.6 million customers with 12.1 million RGUs. Video RGUs increased only 90,900 but telephone revenues almost doubled to $121 million
A week ago Comcast stock was a key focus for investors as not only did it back the Clearwire deal, giving itself a wireless future, with a significant cash infusion, but it produced figures that were not as bad as Wall Street had expected.
While it lost 57,000 basic video customers, it upgraded almost 500,000 to digital and sold a lot more broadband, telephony, HD and DVR customers driving revenue up 14% to $8.4 billion with net income down slightly. Once you take out one time gains from last year, net income was up 10% in line with most of its rivals.
In Europe the picture is less clear with UPC losing 54,500 customers in Q1 with higher churn in the Netherlands, Austria, Hungary and the Czech Republic, but it made up for this with broadband additions of 182,000 subscribers and 177,000 telephony subscribers and some movement towards digital from a mostly analog base and a minor increase in ARPU across the group.
Finally in the UK Virgin Media continued to survive its long term channel run in with BSkyB and had another positive quarter with only 4,900 new subscribers but added 204,300 RGUs, with churn dropping to 1.2%. The Cableco based quad player is in the process of fixing its carriage agreement with Sky and has come out of the difficult period stronger by focusing on adding broadband RGUs.
All in all there’s not a lot to choose between the various types of pay TV operators this quarter, except to say that DTH is still growing its base, while cable is still extracting more and more ARPU from a more or less static base.