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Cable Trends: Predicting Stock Value as a Percentage of Division

in Expert Opinion by
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Cable industry stocks, like all tech stocks, have seen their ups and downs when it comes to performance. The industry has been through periods of high infrastructure spending, acquisitions and divestitures, increased programming costs, higher retransmission costs, and competitive pressures, each playing its own role in keeping values lower.

How do industry revenue streams effect stock prices today with increasing changes within the marketplace becoming more common, and how will these market shifts impact those revenues and subsequently stock prices? If revenue trending is any indicator of stock performance, then look at division breakdowns as a contribution to stock prices. Where will revenue shifts take place and how these help will or hurt company performance going forward.

From analyzing trends in revenue generation, seeing the move from linear programming dominance can clearly be seen as a migration to High Speed Broadband, and Digital Phone. Digital Cable continues to be a strong performer as companies reclaim bandwidth to offer High Definition products. However Cable continues to shed subscribers on a quarterly basis as evidenced by Time Warner Cable’s predicted 30,000 customer lose for the 4th quarter 2009. Comcast, on the other hand, is expected to lose 150,000 customers during the period.

These are not huge numbers in the scheme of things referring to current Cable Company balance sheets, but do signify that portions of market segments are susceptible to continued churn for various reasons, whether those might be shifting demographics, economic pressures, disillusionment in price, etc...  Without good trending information and significant data mining, corrective actions may continue to elusive.

The Triple Play bundle is by far the most dependable asset the industry has at its deposal to both retain and gain new customers. Consumers no longer want just Digital Cable without Broadband, and why not throw in Digital Phone to entice even more. After all the phone companies have stated they want out of the landline business. So, create a great price package that wins loyalty and reduces churn.

And while we are at the one-stop-shop counter; do not overlook the Quad Play. Both Verizon and AT&T have their sights set on offering Mobile Phone to complete a Quad Play bundle as well, throwing a true Superfecta into the mix.

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Len Grace is a technology industry veteran with over 18 years experience with Comcast Corporation. His insights into pertinent and relevant issues within the Broadband/Telecom/Cable/Wireless and Mobile sectors both inform and enlighten readers on current industry trends, analysis, business strategy, competitive landscape and legislative agendas. Len is the founder & editor of The Cable Pipeline, a technology blog who contributes to various technology websites including Light Reading, (Expert Opinion), SiliconAngle, Cisco Community: Service Provider Mobility, Amdocs: InTouch Community Portal, Bloomberg's bx Business Exchange, CircleID, and Sys-Con Media/Utilizer. Also see his reporting.

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