Tuesday, March 20, 2012

Subscribers Taking Programming From Telcos Not Cable

Paid Content has shared an interesting chart from their article on Cable Subscription Growth.  While total multi-video subscription grew in 2011, the biggest news was that cable operators saw a smaller than expected loss in Q4 while others saw a smaller than expected increase.  Still, when you look at the numbers, the top cable operators all saw a loss of basic cable subs last year, along with Dish Network; the losses were less than the gains that Verizon FIOS, DirecTv, and AT&T U-Verse achieved in the same period.

Historically, the cable operators have been losing subs for more than a few years now while telco and satellite have been doing a better job of growing subscribers.  Cable operators have been able to manage this loss because telephone and broadband subscription have been growing and the profit margins on these two businesses are higher than cable.  

As to the causes, housing starts, unemployment, and costs of service are all to blame.  As overall subscription has been rising, many argue that cord cutting is not a factor.  But as more and more programming finds itself on the web, consumers may just start to move over to these OTT platforms.  For now there is movement, but within the cable platform from operator to satellite to telco platform.

Free Wireless, Not Quite

Not too many wireless options out there for consumers.  Beyond the telcos and WIFI access from a cable provider, the choices are limited.  The latest marketing push comes from an unlikely source, NetZero, the former dial up company.  The owners of NetZero, United Online, are offering "free" monthly wireless access, but free may be a misnomer.  "The free accounts are limited to 200 megabytes of data per month_ enough for some email and Web surfing, but little else."  The push is on to "upgrade" to data plans that may not be as competitive as other telco plans.  And to take advantage of this "free" offer also requires a cost; a digital antenna or mobile hotspot is needed to access the signal.  That cost can range from $50 and higher.  So free access actually costs some money.  Well the re-emergence of NetZero at least adds another player to the mix.

Busy Week For Apple

It has been a very busy week for Apple and it is only Tuesday.  In 4 days, the new iPad has generated over 3 million sales.  Not reported, the number of new sales of the reduced price iPad 2.  And with sales to start in more countries, the number of iPads sold is expected to continue to rise dramatically. "Apple sold more than 40 million iPad units in 2011, and several analysts expect the number to top 60 million for the current calendar year."  While laptops and desktops get to be shared  among the family, each family member wants to own their own iPad, iPod, and iPhone device.  Brilliant.

Also on Monday came word that Apple was reinstating a dividend that had been stopped after Steve Jobs had re-entered Apple.  Ironic that it comes back to shareholders months after Steve Jobs has passed away.  For Tim Cook, CEO of Apple, it is the right course to return income to shareholders and to reach a new set of institutional investors.   And along with a stock buyback, it is still just a dent in the free cash that Apple carries.  So what will be announced next quarter?  A new iMac, a stock split?  With Apple, there is always the next announcement.