Suddenlink Communications chairman and CEO Jerry Kent told analysts Monday that the small market cable operator’s decision to replace Viacom’s networks with other, supposedly less-popular fare has been the right one both financially and from a customer standpoint.
In a conference call to discuss second quarter results, Kent said that the decision to replace Viacom’s 24 networks like MTV, Comedy Central and Nickelodeon, with the likes of Revolt TV, Comedy.TV and Sprout, has been the right one.
“The bulk of the headwinds are behind us,” Kent said on the call, adding that the decision no to carry the Viacom networks has ahad a “minimal lasting impact on the connect side of the business.”
Suddenlink lost about 29,400 basic video customers in the second quarter – 10,000 more than in the same period past year -- but attributed that mostly to seasonality as students and residential customers disconnect service as they move to their summer homes, and the impact of a rate increase that took effect during the latter part of the first quarter and the early part of the second quarter. In the past, Suddenlink implemented its rate increases in the fourth quarter.
Suddenlink dropped the Viacom channels on Sept. 30 after the two parties could not reach a carriage renewal agreement. Suddenlink has said Viacom was demanding exorbitant price increases, while Viacom countered that it was only seeking fair value for its content.
Kent said that while some of the second quarter subscriber losses could be pegged to the Viacom dispute, he said compared to the cost of carrying the networks it is “like night and day.”
“I have no doubt that we made the right financial decision and the right customer-impacting decision,” Kent said.
Viacom declined to comment, but people familiar with the company’s thinking noted that Suddenlink has lost bout 6% of its basic video customer base since dropping the channels, which still remain the most watched basic cable family of networks.
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