September 18, 2008 / 10:34 PM / in 9 years

Pay-TV sector say subs safe in face of downturn

NEW YORK (Reuters) - The United States may go through an economic upheaval, but the average American will keep paying to watch television and escape it all -- according to top executives at the largest U.S. pay-TV providers.

Executives who spoke at a media conference on Thursday and earlier in the week, said that, while there was no doubt the pending U.S. downturn would impact customers, they were all fairly certain the average U.S. consumer would not cut back on cable or satellite bills.

“As we look around us at the economy, the subscription part of the business has done well,” said Glenn Britt, chief executive of Time Warner Cable Inc, the second largest cable operator in the United States.

Other pay-TV executives who also spoke at the two-day Goldman Sachs Communicopia Conference also said they were seeing little impact from the economic downturn to date.

“I think people look to television as something they can depend on,” said Chase Carey, Chief Executive of DIRECTV Group Inc, the largest satellite TV provider.

“They cut out restaurants, they cut out theaters, but television is something they can hang on to in tough times,” said Carey.

DirecTV has been successful in marketing itself as a more premium pay-TV service to high quality customers and Carey said this would also help protect them during a downturn.

Investors have typically seen pay-TV stocks as recession proof or recession resistant because Americans were more likely to try and save money by staying at home to watch TV then go out.

But the U.S. economic downturn would be the first since cable operators in particular have started focusing on selling packages of video, high speed Internet and telephone -- the so called ‘triple play.’

Some investors and analysts have been concerned that struggling households could try to reduce bills by cutting off cable all together because the triple play bill is larger than a traditional TV only bill.

But Time Warner Cable’s Britt argued the triple play package offered “great value” and would in fact save money for consumers.

Comcast Corp Chief Financial Officer Michael Angelakis, whose company is the largest pay-TV provider in the United States, said the subscription business model helped give the cable operator “real resiliency.”

“What I really like about the business is we have a defensive, resilient business that can take some body blows related to the economy which we are feeling now,” said Angelakis on Wednesday.

Reporting by Yinka Adegoke; Editing by Andre Grenon

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