Operators Retrench In Tough Times2/08/2009 2:00 AM Eastern
In this period of financial meltdowns, major cable deals have been even more scarce than good economic news. If there has been a trend among cable systems, it is consolidation, and that has significantly reshaped the Multichannel News list of the 100 largest cable systems.
Faced with hefty competition from satellite and telco providers while trying to control costs, MSOs have increasingly consolidated their local operating units into even larger entities. That trend was most notable for Comcast, which consolidated several of its operating units into much-larger entities in 2008. The number of Comcast systems on this year’s list shrank from 29 last year to only 21 this year.
A similar dynamic was also visible at Charter Communications, which reduced its units from 16 to 12. Overall, at least 13 systems from last year’s list disappeared into even larger units.
The trend towards bigger local and regional operating units is also reflected in the number of subscribers served by the top 100.
This year’s top 100 served 56.6 million basic subscribers, up from 54.5 million for the 2008 list and only 47.6 million for the 2003 list, even though the overall number of cable homes has dropped.
The effects of this consolidation can also be seen in the top 100’s executive ranks. Only 71 executives holding the top post at systems on this year’s list were on 2008’s list. Only 37 executives on the 2009 list were there in 2004.
Women have been a major casualty of big cable’s move away from local management. In 2009, women run only 13 of the 100 largest systems, down from the 15 women listed in 2008 and significantly below the 23 female executives in the 2005 ranking. That’s a 44% drop in only four years.
While most still think of a cable system as comprising a franchise area or a local DMA, that notion no longer reflects the way local operations are run. Many of the key decisions that were once made by systems are now made at the corporate level, and most MSOs now have “local” operating units with footprints that cover much bigger areas, minimally a larger metropolitan area but increasingly several states.
Another challenge in compiling a list such as this is the fact that the largest MSOs are increasingly guarded about the kind of local information they provide.
As a result, there are some changes in what constitutes a system on this year’s list.
Previous top 100 lists typically did not include entire MSOs. This year’s list, however, also reflects data culled from a number of smaller operators. Among this year’s top 100 systems, for instance, is Bresnan Communications, which has operations in several mountain states.
Ideally, ranking the systems would be based on a number of criteria such as basic video, digital cable, data and voice subscribers. However, most MSOs only release local data for basic subscribers.
The top 100 list provides a snapshot of how these systems are run, what their footprints are, how many video customers they serve and who is managing them.
However a system is defined, these are cable’s 100 most powerful players on the local level.
Check out the complete Top 100 Cable Systems Special Report in the Feb. 9 issue of Multichannel News.