In this part of the series, we will look at the video subscriber additions or losses for companies in the media sector. We will also look at the factors driving these subscriber additions or losses.
Charter Communications (CHTR) announced its 4Q15 and fiscal 2015 earnings on February 4, 2016. Notably, Charter’s video business had net additions of 11,000 in 2015, which was the first year in the past decade where the video business added customers instead of losing them. In 4Q15, Charter had 33,000 net additions for its video business.
Time Warner Cable (TWC) was another company that saw net video subscriber additions of 32,000 in 2015, after a gap of around six years. Comcast (CMCSA) also had the highest net video additions in one fiscal quarter in the past eight years, with video net additions of 89,000 in 4Q15.
On the other hand, Verizon Communications (VZ) gained only 178,000 video subscribers in fiscal 2015, compared to a gain of 422,000 subscribers in 2014. Verizon had net additions of only 20,000 customers for its FiOS service in 4Q15, which was its worst performance so far for one fiscal quarter.
Now, let’s look at the factors driving these subscriber additions.
Factors driving subscriber additions
For companies like Comcast, X1 deployment, market segmentation, and improving customer support service fueled the additions of video subscribers. Charter’s video additions went up as a result of greater penetration of its video services and “price adjustments.” For telecommunications company Verizon, its FiOS Custom TV remained popular among its video customers.
Comcast makes up 2.9% of the PowerShares QQQ ETF (QQQ). For an investor interested in getting exposure to the television and radio sector, QQQ has 4.9% exposure to the sector.