Major MVPD Will Drop Video Service as Soon as This Year, Analyst Predicts
Ongoing declines in video subscribers at multichannel video programming distributors are boosting the odds that a major MVPD will drop video service, video analyst and consultant Dan Rayburn told us Thursday. It could become a consideration when MVPDs near or dip below the threshold of 2 million video subscribers, he said. Altice USA finished Q1 with 1.8 million video subscribers, down from 2.1 million in Q1 2024, it said Thursday as it announced its latest quarterly earnings. Verizon ended Q1 with 2.6 million Fios Video subscribers, down from 2.9 million a year earlier.
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The moment when a major MVPD drops video service "is coming" as soon as this year, Rayburn said, but the point at which subscriber numbers get too low to maintain the video business probably varies from MVPD to MVPD.
Rayburn said YouTube TV could be the biggest beneficiary of a sizable MVPD dropping video service. WideOpenWest told Wall Street this week it finished Q1 with 49,000 video subscribers, down from 79,000 in Q1 2024. It began turning its video subscribers to YouTube TV in 2023 (see 2305150027). Frontier Communications also made YouTube TV its main video service offering in 2023. It ended Q1 this year with 155,000 video subscribers, versus 207,000 in Q1 2024. Cable One finished Q1 with 101,000 residential video subscribers. It started transitioning cable subscribers to its IP-based TV service, Sparklight TV, when it launched in 2021 (see 2101050016).
In a call with analysts, WideOpenWest CEO Teresa Elder said its video numbers represent a 38% decline year over year, and the trend should continue as it transitions to YouTube TV.
Rayburn said Wall Street seems to care little about video subscriber numbers when it comes to an operator like Altice, as video already doesn't contribute much revenue relative to the overall business. There's more attention paid to video numbers at an operator like Comcast or Charter, where video still represents a sizable slice of revenue, he said.
Altice's Q1 revenue was $2.2 billion, down from $2.3 billion a year earlier. It said it expected 2025 revenue to be $8.6 billion-$8.7 billion; it was $9 billion in FY 2024. The company ended the quarter with 4 million broadband subscribers, down 4.1 million year over year, and 1.2 million residential telephone subscribers, versus 1.5 million.
MoffettNathanson's Craig Moffett noted on Thursday that Altice's video subscriber base is shrinking at an annual rate of more than 14%. The video results were hurt in Q1 by the blackout of the MSG Network and thus of New York Knicks basketball (see 2502240001).
To help address video issues, Altice said it's expanding its flexible video tiers and offering six months of free Disney+ and Hulu streaming service for some internet and video subscribers.
The company also said its fiber customer growth is accelerating: It added 69,000 subscribers in Q1, ending with 607,000, up 300,000 from Q1 2024. In addition, it added 33,000 fiber passings in Q1 and 215,000 over the past 12 months. Altice finished the quarter with 509,000 mobile lines -- adding 49,000 in Q1 alone -- compared with 352,000 in Q1 2024.