Cablevision Creating Additional TV Everywhere Products
Cablevision is developing new TV Everywhere products and looking at leveraging its New York-area Wi-Fi network to deliver some video to subscribers’ electronic devices, Chief Operating Officer Tom Rutledge said during the company’s Q1 earnings teleconference Thursday. For now, the company’s iPad application delivers the company’s channel lineup to subscribers using it in the home. Expanding that outside the home would require additional content licenses from Cablevision’s programmers, he said. One area that represents kind of a middle ground between the open Internet and Cablevision subscribers’ home network is the Wi-Fi network the cable operator is building around New York. “The Wi-Fi network is an Internet service, but it’s controlled by us and for the benefit of our customers, so it creates another space for us to exploit,” he said.
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Some programmers have given Cablevision TV Everywhere rights for out of home viewing, and the company is taking advantage of those to develop new out-of-home video products, Rutledge said. Technically, Cablevision could deliver programming over the Wi-Fi network “with ease,” Rutledge said, but “we have not sought those rights to date, or at least deployed them."
Cablevision’s push to use downloadable security in its set-top boxes is reducing their cost and the company’s capital spending, Rutledge said. “Each piece of equipment we buy is less expensive than what we previously bought,” he said. Costs could drop even further as consumers buy smart TV sets with computer processors built in, he said. Legacy CableCARD devices will still need a set-top box down the road or be limited in the service they can access, because the CableCARD can handle only one-way communication, he said. “To build a two-way interactive service which makes our full product functional, a set-top box is required,” he said.
Unemployment in New York is hurting Cablevision’s subscriber numbers, Rutledge said. There are more unoccupied homes in its service area, making it difficult to win new customers, he said. “What you're seeing is an overall economic impact of our ability to grow in the marketplace, where there is still a significantly high unemployment situation,” he said. Cablevision hasn’t seen any evidence that broadband subscribers are substituting wireless service for cable broadband service, he said. And despite having added fewer broadband customers in Q1 than it did a year earlier, Cablevision’s share of broadband customers relative to its competitors hasn’t changed, he said.
Rainbow Media, its programming division which is about to be spun off, increasingly is looking for more ownership control over the content it carries on its pay-TV networks, but weighs the costs and risks before making any decisions, said Rainbow Media CEO Josh Sapan. Owning those rights means Rainbow can better control and profit from content when it’s carried on new platforms and internationally, Sapan said. Reality and non-fiction programming is cheaper, and Rainbow has been able to take ownership stakes in more the non-fiction programming it carries on its networks.
Cablevision lost about 8,000 video customers during the quarter, leaving it with 3.3 million. It attributed the loss to the bad economy and lingering effects of its retransmission consent dispute with Fox last year. It added 32,000 broadband customers to reach 2.93 million and it added 40,000 phone customers, reaching 2.92 million.
Cablevision will continue to evaluate acquisition opportunities as they come up, said Executive Vice President Gregg Seibert. For each, the company will perform the same analysis it did before acquiring Bresnan -- projecting the operating results of the systems under Cablevision’s control and weighing the financial structure of the deal against other uses of its capital, he said. “We have looked at other opportunities since Bresnan and we haven’t reached the same conclusion,” he said.