This Cable Company Isn't Waiting Around for You to Cut the Cord

By Markets Fool.com


Cablevision is providing options to cord cutters. Source: Cablevision

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With a growing percentage of households either cutting the cord on cable or never signing up in the first place, some cable operators have taken interesting approaches to attract customers. Verizon's efforts with Custom TV, its take on pick-and-pay pricing, have been well-covered. Another company that's getting less attention for its efforts to attract cord cutters is Cablevision , which has several steps in the last couple of months to attract customers who aren't interested in the big bundle of channels it typically sells.

Cablevision has been losing a lot of those subscribers to cord-cutting and competing services from telecom companies like Verizon. Last year, the company lost 132,000 total video subscribers. In the first quarter of this year, it saw an acceleration in video subscriber losses, with 28,600 subscribers going elsewhere for video entertainment, up from 14,000 in the first quarter of 2014. All told, the company lost more than 1% of its video subscribers last quarter.

So, here's what it's doing to stop the bleeding.

I really just want HBO
Time Warner announced the launch of HBO Now in March, naming Apple as its exclusive hardware partner for the launch. While Apple is the exclusive hardware partner, HBO's relationship with pay-TV providers meant that it also extended the opportunity to offer HBO Now to all of its distribution partners.

Cablevision has been the only provider to take HBO up on the offer, and is offering HBO Now to its customers even if they don't subscribe to the company's video service.

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Other cable companies have offered special deals focused on HBO, bundling Internet service with a skinny bundle of channels and HBO, but Cablevision is the only provider that lets you have HBO Now and won't hit you with fees for a set-top box or HD video service or other miscellaneous charges. As such, customers in areas Cablevision serves -- particularly those without an Apple device -- are more likely to sign up for Cablevision's service over the competitors.

How about the best of both worlds?
Last month, Cablevision struck a deal with Hulu to bring its service to subscribers. Cablevision customers will be able to access Hulu directly from their television remote, and won't need to switch to a set-top box or casting device to access the streaming service's library.

Cablevision is the first pay-TV operator to strike such a deal, likely because the move is counterintuitive. While over-the-top streaming services and cable publicly state they offer complementary services, there's mounting evidence that cable companies are not happy with the amount of time customers spend watching Hulu, Netflix, and HBO Go/HBO Now.

Verizon and others charged Netflix for interconnections with their networks in order to speed up delivery of Netflix's streams through the last mile. Previously, they had held out for money from Netflix at the expense of their customers' ability to stream Netflix videos during peak hours. (That's another area where Cablevision has been customer-friendly, allowing Netflix to integrate its servers with its network early on.)And we're seeing cable companies practically boycott HBO Now.

Cablevision's approach to give customers what they want differentiates its service from competitors. So when Verizon expands into its territory, it's more likely Cablevision customers will stick with Cablevision.

If you insist
If you really want to cut the cord, and only pay for Internet service, Cablevision will help you do it. Last month the company began offering a package targeted toward cord cutters aptly named the "Cord Cutter Package."

Cablevision will provide subscribers to one of its packages targeted at cord cutters with a digital antenna free of charge. And it's not rabbit ears: This thing retails for $90 and it will pick up any broadcast channel within 50 miles. Additionally, customers will be able to subscribe to HBO Now, which, as mentioned, is an exclusive offer from Cablevision at the moment.

So, even if customers are going to cut the cord, Cablevision is doing everything it can to ensure that it's going to extract some revenue out of them. It already has more high-speed data customers than video subscribers, but growth in that segment is slowing, too, as Verizon moves into its territory. Last quarter, Cablevision added just 7,000 new Internet subscribers to reach 2.77 million. For comparison, Verizon added 41,000.

Cablevision is doing everything it can to keep customers happy and attract new ones. Even if they don't bite on its video service, Cablevision wants to provide Internet service. If its recent initiatives are successful, the company could continue to grow its cable division revenue and cash flow despite the growing trend of cord-cutters and cord-nevers.

The article This Cable Company Isn't Waiting Around for You to Cut the Cord originally appeared on Fool.com.

Adam Levy owns shares of Apple. The Motley Fool recommends Apple, Netflix, and Verizon Communications. The Motley Fool owns shares of Apple and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.