Conversion rates to vMVPD subscriptions, seen by industry as a “lifeboat” for programmers amid cord cutting, “fell off the table” in Q4, MoffettNathanson's Craig Moffett wrote investors Friday. The analyst warns a 1:1 conversion rate “was highly unlikely to be sustainable” to offset linear TV declines. Though YouTube TV and Hulu Live TV did well with what he estimated as net additions of 400,000 and 500,000 in Q4, DirecTV Now and Dish’s Sling TV “did very badly.” After accounting for smaller operators including PlayStation Vue and fuboTV, “not nearly enough" vMVPD subscriptions were added to offset declines in linear TV, Moffett said, estimating total subscriptions, including vMVPDs, fell 248,000 in Q4, the worst since mid-2017.
Charter Communications met with an aide to FCC Commissioner Mike O'Rielly as it continues to lobby the agency regarding its petition for a declaration of effective competition in Massachusetts and Hawaii due to DirecTV Now's presence (see 1902150028), said a docket 18-283 ex parte posting Thursday.
Atlantic Broadband in coming months plans to upgrade the Springfield, West Virginia, cable system and integrate it into its existing footprint in Hampshire County, the cable ISP said Wednesday as it announced it had completed acquisition of the cable system from Comcast. It said it will offer expanded video services, high-speed internet and digital phone after the work is complete.
The American Cable Association is continuing its push to let cable operators electronically send notices to broadcasters that currently have to be delivered via certified mail, with a docket 17-317 posting Tuesday recapping an ACA meeting with an aide to Chairman Ajit Pai about the proposal (see 1810170023).
Commercial leased access "is an anachronism" that probably couldn't get past a First Amendment challenge, especially since video programmers have many alternate distribution routes, NCTA, Comcast and Charter Communications officials told FCC Media Bureau staff including Chief Michelle Carey. So recounted a docket 07-42 posting Friday. The cablers said part-time leased access -- not statutorily required -- puts big administrative burdens on the industry, and cable spends millions of dollars annually servicing leased access user needs. Cable operators carrying leased access channels on the basic tier should be able to calculate average implicit fees based on a basic tier-specific calculation, not the blended calculation required under the existing formula, they said.
It seems clear based on data so far that legacy, facilities-based distributors lost close to 950,000 subscribers in Q4, the second worst quarter ever, behind Q3 2018, BTIG Research analyst Rich Greenfield wrote investors Wednesday. He said benefits from virtual MVPDs slowed materially in Q4, leaving around 8 million subscribers at year's end. Minus vMVPD subscriber gains, MVPD subscriber losses exceeded 500,000, he said. Year-over-year subscriber trends that had improved throughout 2018 are going to worsen again in 2019, he said.
IPTV overtook direct-to-home last year as No. 2 MVPD type after cable, with 23.4 percent of the 1.07 billion-household global market, Kagan reported Wednesday. IPTV grew 14.3 percent last year, but cable is projected to decline at a 0.3 percent compound annual growth rate by 2023 due to migration to IPTV in Asia Pacific and Western Europe. IPTV’s projected 7 percent subscriber CAGR in the period is second to pay digital terrestrial TV at 8.5 percent. Cord-cutting effects are primarily seen in North America where multichannel subscribers, revenue and penetration are projected to decline for the foreseeable future. Oversaturated markets including Singapore and Hong Kong are experiencing declines on cord cutting. In Europe, the biggest threat to traditional multichannel integration of over-the-top and catch-up TV services, along with ability to stream channel packages via hybrid boxes, Kagan said. The global multichannel market grew 3.1 percent last year, with China, India and the U.S. accounting for 57 percent of subscribers. By 2023, China and India are expected to account for half.
The FCC’s extension of comment deadlines in its proceeding on cable carriage election notices is set for Federal Register Thursday publication (see 1812140017). Comments are now due March 18, replies March 28.
NCTA and Hawaii disagree on replacing basic rate-setting methodology for cable operators, in FCC docket 17-105 postings Monday. Given the little such regulation, a big overhaul would be "a tremendous waste of administrative resources," the Hawaii Department of Commerce and Consumer Affairs said. The department said it would be "inappropriate" for the FCC to revise its Communications Act Section 623(b)(5) interpretation of whether equipment used to receive the basic service tier should be exempt from rate regulation if the gear also can be used for other signals. It said that would sidestep Congress' "clear intent" and let cable operators avoid regulation by using mixed use-capable equipment. Any replacement of the rate methodology for operators that become reregulated should start with basic service tier rates allowed by the franchising authority before that rate regulation was eliminated, Hawaii said. First-time regulatees would need a new mechanism to reach back to when that operator was subject to effective competition, it said. NCTA said the FCC should continue to set rules about local regulation to give local franchise authorities direction. The association pushed an updated comparative benchmark methodology to compare regulated rates to a sampling of basic tier rates charged by the same operator in communities with effective competition. Or cable operators should have the option of justifying current basic service and equipment rates and future rate increases with simplified versions of forms 1240 and 1205 that don't require looking backward.
The FCC Media Bureau will give enhanced confidential treatment to some confidential and competitively sensitive information that may be filed as part of beIN Sports' carriage complaint against Comcast (see 1902060052), said a docket 18-384 order posted Friday. The order covers such information as affiliation agreements involving Comcast's NBC Sports and Universo networks, plus the cabler's viewership analyses.