Kent: Viacom Return Unlikely

Suddenlink CEO Says ‘We’ve Moved On”
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Suddenlink Communications CEO Jerry Kent gave little hope that a carriage deal will eventually be reached with programmer Viacom, adding that the mid-market cable operator has “moved on.”

Viacom went dark to Suddenlink customers on Oct. 1 after the two could not agree on a carriage aghreement.  Suddenlink reported fourth quarter results Tuesday and though basic video losses at 34,800 customers were about four times more than the 8,600 subscribers it lost in the same period in 2013, Kent said those losses were expected and turned out to be even lighter than the company had thought. In addition, Kent said that Suddenlink began to show improvement as the quarter progressed, adding that year to date, subscriber figures are about in line with the previous year.

According to Suddenlink, the MSO also has managed to retain about 99.7% of its total residential customers – meaning that while between 2% and 2.5% of its video customers have defected in the wake of its Viacom dispute, the overwhelming majority of its broadband customers have stayed, despite aggressive promotional activity from competitors.

“[L]ooking at our results to date since this decision, each month has performed progressively better and, from the trends we’ve seen so far in 2015, our momentum is comparable to first-quarter results from previous years,” Kent said on an earnings call Tuesday. “At this point, I’d say we’re pretty close to business as usual.  We may still some lessened residual impact on video units, but customer relationships are once again growing at an extremely healthy pace.”

These results apparently have emboldened Suddenlink’s Kent, who said that it is highly unlikely that Viacom channels would ever return to his systems.

“We’ve moved on,” Kent said in an interview. “We have replaced the channels with some really high-quality programming from Disney, Discovery, Fox and Hallmark.”

The Suddenlink chief didn't completely shut the door, though.

"If Viacom would come back to the negotiating table and give us attractive rates for those channels we want to carry, we would be happy to [carry] them," Kent added.

Viacom declined to comment.

Kent added that viewing minutes have actually risen since he dropped the Viacom networks on Oct. 1, adding that some of the new networks have higher ratings and viewership than the Viacom channels they replaced. He declined to be specific.

While the numbers after December look encouraging, I should be noted that Dish Network – one of Suddenlink’s biggest video competitors – had its own carriage disputes going on at the same time, which may have impacted the numbers. In October, eight Turner Broadcasting Networks went dark to Dish subscribers (they were restored on Nov. 21)  and in December, Fox News Channel and Fox Business Network went dark to Dish customers for nearly a month. They were restored on Jan. 15.

While Kent does not deny that Viacom has had an impact, he said meeting the programmer’s demands would have been more costly.

“Ending the Viacom relationship did end up in some video subscriber losses,” Kent said in an interview. “But compared to the cost that it would have taken to keep Viacom programming on a long term basis, it would have cost our customers considerably more,” Kent said. “And clearly from the minimal amount of video downgrades that we experienced, our customers did not believe there was a benefit to the cost value relationship of Viacom programming.”

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