If you had told rural cable executives 20 years ago that they could be profitable at take rates of 38 percent, they wouldn’t have believed you, as the then-extant business model required take rates on the order of 70 percent.
That was at at time when the sole product was subscription television. Today, with high speed internet access, voice and video, Cable One, which serves rural and small markets, does well on 38 percent take rates (penetration).
Of 2.1 million locations passed, Cable One has 805,000 accounts out of 2.1 million passings. So 38 percent of locations able to buy service actually do so. That includes business locations and consumer homes.
Of those customers, 663,074 subscribed to data services, 326,423 subscribed to video services and 125,934 subscribed to voice services. That implies sales of about 1.12 million product units, which might be likened to penetration of perhaps 53 percent of locations buying one service.
Of the five primary products, residential data generates 46 percent of revenue, residential video (32 percent), business services (data, voice and video represent 14.5 percent), residential voice contributes 3.8 percent and advertising sales generate 2.3 percent of total revenue.
As always has been the case, subscription entertainment video is not very profitable. “In 2018, our adjusted EBITDA margins for residential data services and business services were approximately six and seven times greater, respectively, than for residential video,” the company says.
Just how much market share a viable contestant would need in an urban market remains a bigger question.
No comments:
Post a Comment