Switched-Broadcast Video Coming to Cablevision
A Cablevision test of switched video service for foreign language speakers succeeded and the service is ready for full deployment this year, said COO Tom Rutledge. The service, $5 a month for expanded basic cable subscribers, will offer 30- 60 more Spanish-language channels. Basic cable subscribers would pay $15 monthly for the service.
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Foreign-language programming, “while highly valuable to customers, has limited appeal to a mass audience,” Rutledge said. Using switched-video architecture, Cablevision can offer programming to a specific group of customers without overhauling the network to handle the increased bandwidth, he said. Cablevision already sells the service in N.Y.C., said Rutledge, through an experiment in Patterson, N.Y.. Switched video “essentially allows you to have unlimited channel capacity on our cable system,” he said. The comments came in a teleconference with investors during which Cablevision reported better-than-expected Q1 revenue and subscriber gains.
Switched-broadcast video has been gaining momentum in the cable industry since operators like Time Warner and Cox rolled out the service, said Sanford Bernstein analyst Craig Moffett. Cablevision would be the first cable operator to offer the service throughout its system -- though for now, the firm plans to offer only specialized foreign language programming using switched video, he said.
Cablevision added 164,659 digital cable subscribers, 112,289 broadband customers, and 133,967 VoIP customers Q1, exceeding most Wall Street analysts’ forecasts by about 50%. Cablevision also added 38,772 basic cable customers during the quarter, the highest 3-month gain in that category since 2000, said Rutledge. “We did better than even we thought we would do,” he said. Cablevision expects to add more basic cable customers and more total revenue generating units (RGUs) and spend more capital than it predicted, said the company. It revised its growth rate for basic cable subscriber to 2.5-3% annually from 2-2.5%. Revenue for Cablevision telecom interests rose to $993 million in Q1 2006 from $851 million a year ago.
Cablevision used the investors forum to pan Verizon FiOS TV deployment in Massapequa Park, N.Y. Verizon told investors in last week’s Q1 conference call it had hit 6.5% penetration the first 4 months of service there. “We don’t believe that number and we don’t understand how they can get that number,” said Rutledge. Cablevision has lost about 200 video customers -- of about 8,200 households -- in Massapequa Park since Verizon began offering FiOS TV there, but has added 28 back, Rutledge said: “The actual penetration rate they've had is a little less than 2 percent.” He accused Verizon of focusing its marketing in small areas such as Massapequa Park to grab headlines with inflated penetration numbers. “They're trying to market in very concentrated areas so they can get a press release and look like they're being successful,” he said.
“Of course, we stand by this penetration figure,” said a Verizon spokeswoman in an e-mail. “Customers in Massapequa Park and other communities want a choice of TV providers, and we're seeing great initial acceptance of FiOS TV.
Revenue at Rainbow, Cablevision’s programming wing, also rose to $206 million from $200 million last year, despite closing 2 Metro channels in Q2 2005, Rainbow Pres. Josh Sapan said. Cablevision reported total net revenue of $1.4 billion, up from $1.2 billion last year. The firm’s Q1 net loss shrank to $58.9 million from $118.9 million last year. - - Josh Wein