Big Deals, Changes for Markets

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Consolidation has once again transformed Multichannel News' list of the top 100 cable systems. Thanks to Comcast and Time Warner Cable's acquisition of Adelphia Communications, system swaps between between the two companies and organizational changes at other operators, a slew of systems either expanded their footprint or were swallowed up by larger clusters. Fewer than three quarters of the systems on last year's list survived into 2007 with the same division name. And, many of the survivors have a much expanded footprint.

Thanks to those changes, the 100 largest systems now serve 54,276,131 basic subscribers, significantly up from 51,013,116 in 2006 and 47,644,436 in 2003.

Consolidation and reorganization's effect was most obvious in such areas as southern California, Ohio, Texas and New England, where Time Warner divisions swallowed up a number of Adelphia and Comcast operations, or in Washington, D.C., Boston, St. Paul., Pittsburgh, Houston and Florida where Comcast expanded its clusters or gained new systems.

Big markets were the most affected. Last year, a system with 600,000 basic subscribers would have easily made it into the top 25. This year, that system would rank 32nd.

The impact of the deal making went beyond the Adelphia deal. Cox Communications and Charter Communications systems also changed hands and for the first time Suddenlink Communications has a system in the top 100.

But the cutoff for making the list actually fell from 150,000 basic subscribers in 2006 to 107,000.

In general, many of the systems reported healthy growth in basic-subscriber counts. Among the systems returning to the list, 62% saw subscriber counts increase and only 16% declined, with the rest staying about the same. Consolidation and reorganization helped account for some of that growth but a number of systems that didn't significantly change their footprint also showed healthy increases, indicating that cable is beginning to make headway against satellite competition.

Despite all the organizational changes, the talent pool for the industry's top managers remained remarkably similar. More than three quarters of the top executives (76) were on last year's list. And at least 5 other top managers have been on previous lists.

Women, though, didn't fare as well. Only 14 of the top systems are now managed by women, down from 20 last year and 23 in 2005.

Tighter control over bigger clusters by a few key players can also be found in another statistic: This year only a handful of systems provided us with penetration data for their other products, down from nearly a third three years ago.

As always, there are a few important caveats. Ideally, Multichannel News would like to rank the largest systems by franchise area or market and include a great deal of information about other digital products. But cable systems for specific franchises and designated market areas are now almost always managed by larger divisions, which have the final say on issues like pricing and channel lineups. None of the major operators currently provide information by market or franchise area to the press and with a few notable exceptions are not willing to share data on specific products for their larger divisions.

That has forced us to adopt a very liberal definition of what constitutes a cable system. While many of the systems ranked here cover tight geographical areas that would fall into the traditional definition of a cable system, others span more than one state. As a result, the listing reflects how the major operators manage their operations.

The subscriber data is the most recent available, generally at the end of the third quarter, though a few systems provided November and December data and pricing for the expanded basic is for either December 2006 or Jan. 2, 2007.

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