PREVIEW-Cable loses subscribers, satellite gains in Q1
* Outlook for cable companies seen worsening
* Satellite TV helped by high-definition programming
NEW YORK, April 28 (Reuters) - U.S. cable companies are expected to have lost more basic video subscribers in the first quarter due to the housing market slump, the economic slowdown and stiff competition from satellite and telephone companies.
Comcast Corp (CMCSA.O) is forecast to have lost 73,400 basic video customers in the quarter, compared with a drop of 21,000 at Time Warner Cable Inc (TWC.N) and a fall of 4,000 at Cablevision Systems Corp (CVC.N), according to a Reuters poll of eight analysts.
This contrasts with Wall Street's expectation that U.S. satellite television companies DirecTV Group Inc (DTV.O) and Dish Network Corp (DISH.O) added a combined 320,000 subscribers in the quarter, helped by high-definition services.
"Everyone can agree that the directional trend over the year is going to get worse for cable," said Standard & Poor's analyst Tuna Amobi, who believes the economy is already in recession and sees no sign of a housing recovery this year.
While the subscriber losses are a small fraction of Comcast's total customer base of 24 million or Time Warner's 14 million, more worrying for investors, analysts said, is the slowing growth in revenue generating units (RGU). RGUs are the number of services a provider can sell to consumers such as digital video recorders, Internet access or home phone line.
"RGU growth and basic subscriber growth is going to come under more pressure," said Amobi.
Cable's metrics also have tough comparisons with last year, when rapid growth in the first half was led by new digital TV and phone customers.
"Digital video additions are still going to be strong, but comparing to last year they'll be down," said Miller Tabak analyst David Joyce, who expects cable to post 750,000 net subscriber additions compared with 1 million last year. He forecast a 25 percent drop in Internet access subscriber growth.
Satellite TV's growth has so far been helped by consumer perception that satellite's high-definition programming is superior to cable's, say analysts.
"The big lever for satellite is HD, they have a much stronger marketing message than cable," said Todd Mitchell, an analyst at Kaufman Bros.
DISH Network is expected to be hurt more by the economic slowdown than DirecTV, which has targeted the higher end of the market. Six analysts polled by Reuters forecast DirecTV would add 202,000 subscribers compared with 235,000 subscribers a year-ago, while DISH is forecast to have 121,500 additions versus 300,000 a year earlier.
PHONE
Both satellite and cable companies face stiffer competition from AT&T Inc (T.N) and Verizon Communications Inc (VZ.N), which have been increasingly successful in winning video customers.
AT&T added 148,000 subscribers to its U-verse TV service in the quarter and said it was on track to reach a target of more than 1 million subscribers by the year-end. Verizon added 263,000 FiOS TV customers, bringing the total to 1.2 million.
While cable is still winning phone customers at a rapid pace, the overall deterioration of the fixed-line consumer market was evident in AT&T and Verizon's quarterly results.
"It could be that the cable operators are grasping at shadows here and that the market is crumbling before their very eyes," said Craig Moffett, an analyst at Sanford C Bernstein, implying more consumers are taking wireless phones.
"The deterioration in access lines at the telcos could speak more to the shrinkage of the market overall than it does to share gain by cable."
Comcast has become the fourth largest U.S. residential phone company in less than three years with 4.1 million subscribers. Wall Street expects the company to report a 10.5 percent rise in revenue and earnings per share of 18 cents when it releases its numbers on Thursday, compared with 26 cents a year ago, according to Reuters Estimates.
Time Warner Cable, which reports on Wednesday, is expected to post an 8 percent rise in revenue, while profits will drop to 22 cents a share from 28 per share. Cablevision is forecast to turn in a profit of 1 cent per share versus a loss of 11 cents per share a year earlier when it reports on May 8.
DIRECTV, which reports on May 7, is expected to see profit rise to 32 cents a share from 27 cents year ago. DISH is forecast to see profit rise to 51 cents from 35 cents a year ago. (Editing by Andre Grenon)
