WideOpenWest (aka “WOW!”) said Thursday that more than 13% of its new customers are signing up for YouTube TV since the Englewood, Colorado-based midsized cable operator began offering Google’s vMVPD as its primary video offering back on August 12.
"One of the things we're also seeing is we have new customers who perhaps wouldn't have considered us before, [they] are considering us now because of the YouTube TV offering,” WOW! CEO Theresa Elder told analysts during her company's third-quarter earnings call. (Investing.com has a full transcript of Thursday's call here.)
WOW! reported the loss of around 9,000 more traditional pay TV subscribers in the third quarter and finished September with only around 100,800 of these endangered birds left. (You can read WOW!'s Q3 earnings release here.)
WOW! is among a number of tier 2 and 3 cable operators that are exiting the low-margin linear video bundling business and are marketing third-party vMVPDs as a means of enticing broadband customers and reducing churn for that segment.
In August, WOW! began offering YouTube TV to new customers at a $10-a-month discount for one year, with the virtual pay TV's billing integrated into their monthly high-speed internet and/or mobile statement.
“YouTube TV allows us to transition away from higher-cost, low-margin video to a higher-margin service with an even greater mix of channels for our customers,” Elder said. “What we are doing is unique among cable operators and is giving customers more of what they really want at a much better price.”
“In addition to the benefits to our customers we will be able to accelerate the reclamation of bandwidth previously used for our legacy video service,“ she added. “This allows WOW! to efficiently transition our network for DOCSIS 4.0 and serve the growing demand for customer usage without having to overbuild their own network.”
Elder said the company isn't necessarily pushing its dwindling linear video customers to leave … but soon they won't be able to stay here.
“We definitely are encouraging customers who take our traditional video to either subscribe to YouTube TV or a streaming service,” she said. “We have not forced customers off of video to date, and we are really trying to manage churn on that to continue to support that. With that said, we know that over the next year, 1.5 years, we want to completely get [video] off of our QAM network.”
Like most cable companies operating at the dawn of the low-priced fixed wireless access home internet age, WOW! is losing customers in high-speed internet — it bled 4,400 broadband customers in Q3. But with customers upgrading their plans — over 80% of WOW! subscribers are now on tiers of 500 Megabits per second or higher — and paying or more bandwidth, high-speed data revenue increased 7% year over year to record levels.
As for YouTube TV, Google hasn't disclosed a customer metric for the vMVPD since it revealed last spring that it had surpassed 6 million users. But with the cable industry redirecting increasingly making it the default platform or video, customer growth would seem to be quickening.
Back in July, the equity analysts at LightShed Partners published an interesting analysis of what will happen to network licensing rates negotiations once YouTube TV cements itself as a top-4 pay TV distributor. That seems to be already happening.