Cable Broadband Surpassing Video: Moody's

In a probably game-changing shift for the cable trade, US MSOs can before long have additional broadband subscribers than video subscribers for the primary time within the industry's 65-year history.

In a new report issued last week, Moody's Investors Service predicts that US cable operators can amass additional high-speed knowledge customers than pay TV customers by next year, as they keep gaining additional broadband users and shedding video viewers. In fact, the debt-rating agency calculates that the crossover purpose is already occurring, with each services currently boast regarding fifty million subscribers.

Several major US MSOs have already got additional broadband customers than video customers, or area unit closing in on the crossover purpose. each Time Warner Cable opposition. (NYSE: TWC) and Charter Communications opposition. -- the second- and fourth-largest US MSOs, severally -- currently have additional broadband than video customers, whereas Cablevision Systems business firm. (NYSE: CVC) would have reached the crossover purpose at the tip of the second quarter. (See Cable Leaves Telcos in Broadband mud.)

Broadband replacement video because the anchor product for the trade might have each positive and negative effects for cable firms, in keeping with Moody's. On the positive aspect, the rating agency notes, fewer video customers can lower cable operators' programming prices, that are sharply rising for years. In turn, operators' profit margins ought to improve, as a result of high-speed knowledge could be a higher-margin product than TV.

On the opposite hand, the Moody's report points out, "an geologic process subscriber base for video conjointly poses risks" for cable suppliers. that is as a result of their economies of scale could suffer for such areas as technical and client service, driving up prices per client. additionally, cable operators that appear to be forsaking their video base simply may even see their brands suffer, as well.

Given these factors, the report suggests that it's going to be for a few cable suppliers to unbundle their broadband and video offerings, and place bigger stress on broadband, particularly in less-competitive markets. The report stresses that such tiny and midsized cable operators and overbuilders as RCN business firm. , Grande Communications , and Wave Broadband have all engineered "sustainable" businesses with comparatively low video penetration rates however a lot of higher broadband adoption rates.

However, Moody's contends that cable operators in additional competitive markets can seemingly have to be compelled to maintain robust video offerings owing to the danger of losing double-play and triple-play subscribers to telcos. specifically, the agency warns that such MSOs as TW Cable, Cablevision, and Cox Communications opposition. might struggle as a result of their regions have important overlap with the fiber buildouts of Verizon Communications opposition. (NYSE: VZ)'s FiOS and AT&T opposition. (NYSE: T)'s U-verse networks.

AWM 20624 80C 60V VW-1  50 Pins Flexible Flat Cable  Multi-Layer flexible printed circuit