March 25, 2013 08:15 ET

Cable TV Operators Look to Offer New Networks and Channels

The Provides Stock Research on Charter Communications Inc. and TiVo Inc.

NEW YORK CITY, NY--(Marketwire - Mar 25, 2013) - U.S. cable operators continued to face significant challenges in 2012. Cable operators once again lost subscribers in 2012 amid increasing competition from IPTV services. Going forward the key for cable operators such as Charter Communications Inc. (NASDAQ: CHTR) and TiVo Inc. (NASDAQ: TIVO) is to win subscribers by offering new networks and channels. According to IHS Screen Digest Television Intelligence Report, which was released in December last year, cable operators in the U.S. lost 460,000 video subscribers in the third quarter of 2012. However, cable operators can take heart from the fact that they posted their best third-quarter performance in two years. In the third quarter of 2010, cable operators had lost 739,000 subscribers, while in the third quarter of 2011, they lost 512,000 subscribers. The fact that the loss of subscribers slowed down in the third quarter of 2012 is a good sign for the industry.

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Another encouraging thing for cable operators is improving the labor market outlook. A number of households have held back from taking a pay-TV subscription in recent years mainly due to the uncertain outlook for the labor market. However, the labor market in the last few months has shown signs of significant improvement. The improved outlook could prompt a number of households to buy subscriptions now. According to the IHS Screen Digest Television Intelligence Report, U.S. cable operators are also making gains in high-speed data and voice. Going forward, high-speed data is going to be a key growth driver for the industry.

Last week, Charter Communications Inc. and Liberty Media Corporation announced that Liberty signed a definitive agreement with certain investment funds to acquire approximately 26.9 million shares and approximately 1.1 million warrants in Charter Communications Inc. for around $2.617 billion.

Tom Rutledge, President and CEO of Charter Communications Inc., last week said that Liberty Media and its Chairman John Malone have a well proven track record in the industry and in creating shareholder value, and while the company has made real progress, it is still in the beginning of its transformation efforts, and therefore welcomes the addition of Liberty Media as knowledgeable shareholders.

Late last month, TiVo Inc. reported its financial results for the fourth quarter and the full year ended January 31, 2013. For the fourth quarter, the company's service and technology revenue stood at $65.7 million, the highest in its history. The company's service and technology revenue for the quarter also came in above its guidance.

Tom Rogers, President and CEO of TiVo Inc., said that the company made significant progress in its business during fiscal year 2013, culminating with adjusted EBITDA profitability, excluding litigation expense for the fourth quarter. Rogers noted that the company achieved success in five key areas during the last year, which included defining the future of television through the launch of new whole-home and multi-screen TiVo offerings.

Indeed, new networks and channel offerings will be the key for cable operators going forward.


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