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Cable TV not losing customers to online video

Cable TV subscriber numbers hold steady, despite rise of Hulu and other services.

By Associated Press / February 17, 2011

A Philadelphia Phillies player practices in front of an advertisement for postseason baseball on Fox in San Francisco, Oct. 18, 2010. A two-week dispute with Fox blacked out some World Series games for Cablevision customers and cost the cable TV provider some 35,000 subscribers last quarter. But overall, paid cable TV gained customers.

Jeff Chiu/AP/File

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LOS ANGELES

Cable TV and other companies that provide subscription services are striking back at the notion that people are dropping their TV packages en masse to watch video over the Internet. Industry gains in the fourth quarter returned to normal following a spate of cancellations spurred by the end of discounted pricing.

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Subscriber losses from top-ranked Comcast Corp. and No. 8 Cablevision Systems Corp. reflected one-time items, such as the defection of customers angry over a two-week blackout of Fox programs on Cablevision in October.

Comcast's loss of 135,000 video subscribers was about a third less than expected as it held onto more customers with better programming, and fewer people dropped service with the expiration of promotional prices offered during the 2009 transition to digital over-the-air broadcasts. Comcast ended with 22.8 million video customers, and Cablevision had 3.3 million.

Those losses were more than erased by gains at such rivals as AT&T Inc. and Verizon Communications Inc., which offer video services over phone lines. The phone companies reported fourth-quarter results last month, while Comcast and Cablevision announced them Wednesday.

Along with an expected gain of about 100,000 video subscribers combined at satellite operators DirecTV and Dish Network Corp., which report next week, the established pay TV industry is on track to add 200,000 to 250,000 TV subscribers in the final three months of 2010, according to Nomura Securities.

The gains are "another piece of evidence that cord-cutting is not impeding subscriber activity," said Nomura analysts Mike McCormack and Mike Liddell in a research note.

Cord-cutting refers to the phenomenon of people dropping pay TV packages with the growth of online video offerings through Hulu, Netflix and other services.

Cablevision said Wednesday it lost 35,000 video subscribers in the quarter, ending with 3 million when excluding the 306,000 subscribers it picked up by buying Bresnan Communications in mid-December. But it attributed almost all of the loss to its dispute with Fox. The two-week standoff, during which some World Series baseball games were blacked out to customers, saved it money in programming fees but cost it customers, the company said.