People don’t stop watching TV, using the Internet or making phone calls during recessions. That means the cable operators — which offer all three services — stand to strengthen while most everyone else hurts during the next few months.
There’s also a case to be made that because they control the pipes — and for now, all the data that flows through them — cable companies will win out as digital media continues to converge.
For now, people will cut back on DVR features and premium channels, but that won’t have a huge impact, the Wall Street Journal reminds us:
Time Warner Cable Inc. warned earlier this month that it was seeing a slowdown in some of its premium video services, prompting a selloff. But investors shouldn’t overreact.
Consider these numbers. Comcast (CMCSA), the biggest cable operator by subscribers, reported average monthly revenue per subscriber of $110.71 for the third quarter, 8.8% higher than the year-earlier number. Video accounts for about $64 of the number, up $3.20 from a year earlier, with $35 coming from Internet access and phone combined, up nearly $6.
Only about $4 of per-subscriber monthly revenue at Comcast comes from DVR and HD revenue, estimates Sanford C. Bernstein analyst Craig Moffett, while pay per view contributes less.
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