Orange County Register

It was another rough quarter for Time Warner Cable, which lost TV customers, posted lower profits and saw a drop in premium channel subscriptions. It lost 84,000 video customers by the end of the third quarter, ended Sept. 30, compared with the second quarter.

But in almost all other areas, the cable TV provider grew: It added more Internet and phone customers, more digital cable customers and more multi-package customers. That helped offset the exodus of video subscribers to a loss of 25,000 customers. Overall sales were up 4 percent, to $4.5 billion, compared with $4.3 billion last year.

The company has been losing video customers as new TV services like Verizon FiOS and AT&T U-verse enter the market and customers head for the Web to view TV shows on their own time.

	2Q 2008	3Q 2008	4Q 2008	1Q 2009	2Q 2009	3Q 2009
TW video subscribers	13,297k	13,266k	13,069k	13,105k	13,048k	12,964k
Change		-31,000	-197,000	36,000	-57,000	-84,000

While the number of customers fell less than 1 percent, to 14.652 million subscribers, Time Warner got a bit more money from each one. Subscription revenues grew 5 percent, to $4.3 billion, thanks to more digital video, Internet and phone customers. Separating out video alone, Time Warner made 2 percent more off TV subscribers, coming in at $2.698 billion in the third quarter, compared with $2.639 billion a year earlier.

Still, Time Warner made less money than it did a year ago. Net income fell 11 percent, to $258 million, compared with $301 million a year earlier. Part of that was because it had to pay more for the TV channels it offers customers. The cost of video programming grew 6 percent, to $1 billion. Meanwhile, more customers dropped basic video and premium channel subscriptions.

In the chart below, Time Warner notes that about 13 million pay for plain-ol’ cable TV service. About two-thirds also pay for digital cable and high-speed Internet.

The company was hit hard in other profit-making areas. Advertising revenues declined to $182 million, a 19 percent drop, attributed to fewer auto, media and political commercials.

Glenn Britt, the cable provider’s chief executive officer, remained upbeat and said in a statement: “Our business model is resilient even in a tough economy and in the face of intense competition. We’ve built great assets in our plant and customer relationships that provide a strong foundation for continuing growth.”

Recent Time Warner news:

For more on Time Warner, check The Gadgetress special page: gadgetress.freedomblogging.com/twc

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