Subscribe
Mediacom, America’s eighth largest cable company, lost 20,000 video subscribers in the second quarter of 2011, joining a growing parade of cable companies reporting increased cord-cutting by customers who either cannot afford, or don’t need increasingly-costly cable TV service.
The cable operator, which largely serves small cities and suburban areas, has suffered from notoriously poor consumer ratings for several years, and some customers have apparently had enough. Mediacom, which went private earlier this year, provided fewer details about its performance in its first quarter as a private company, but the information it did provide showed attempts to make up the losses with rate increases on remaining customers and increased revenue from phone and broadband sales, and Mediacom’s advertising business.
| Three months ending | June 30, 2011 | March 31, 2011 | June 30, 2010 |
| Basic subscribers | 634,000 | 654,000 | 677,000 |
| High-speed data subscribers | 470,000 | 469,000 | 447,000 |
| Phone subscribers | 177,000 | 175,000 | 168,000 |
| Digital customers | 415,000 | 421,000 | 394,000 |
| Average monthly revenue per subscriber | $113.75 | $109.17 | $104.16 |
The company’s customers in its strongholds in the southeastern and midwestern United States have been impacted hard by declining property values and high unemployment. Impacted consumers are paring back expenses, and while they are keeping phone and broadband service, cable TV is increasingly being dropped.
Earlier conference calls with Mediacom company officials note an increasing number of customers are only being rescued when the company discounts the cost of the service as a customer retention tool. The company has been hard selling its “VIP Pak” — a triple play package of cable TV, phone, and Internet for $90 a month, but it comes with lots of fine print: mandating a 24-month contract, a required subscription to HBO, and gradually increased rates after the first year. Mediacom’s bundled offers lock in customers with two year contracts, but don’t protect them from periodic rate increases, which are automatically applied as implemented.
Customers looking for standalone broadband or a “double-play” will also find high prices, two-year contracts and early termination fees in their future:
- Cable TV & Broadband: $79.90 for the first year, $99.90 for the second, with a $240 early termination fee
- Cable TV: $49.95 for the first year, $64.95 for the second, with a $240 early termination fee
- Broadband Only (12/1Mbps): $49.95 for the first year, $54.95 for the second, with a $240 early termination fee
