Mediacom holds its own in cable subscribers

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by Paul Schreiber|ret||ret||tab|

SBJ Reporter|ret||ret||tab|

pschreiber@sbj.net|ret||ret||tab|

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While Mediacom reports positive financial results for its operations nationwide, Springfield's lone cable service provider has experienced little to no growth in its most recent local subscription numbers.|ret||ret||tab|

"Our growth year over year was pretty flat," said Bill Copeland, area operations manager for Mediacom. The company's market share is between 60 percent and 65 percent, he added. |ret||ret||tab|

Mediacom's two-month-old high-definition television service has been effective in attracting new subscribers, Copeland said. "Our initial projection was that we'd gain probably100 a month" and the company is exceeding budget, he said, adding that sales of the company's digital services also are ahead of budget.|ret||ret||tab|

While revenues are up on the national level, subscribership is down slightly. First quarter 2004 financial results put total revenues, including video, data and advertising receipts, at $263.4 million against $242.7 million for the same period last year, according to the company's investor relations Web page. |ret||ret||tab|

As of March 31, 2003, monthly fees averaged $50.96 for about 1.6 million users. By 2003 year end, average monthly fees had climbed to $55.75, while overall user numbers declined to 1.57 million subscribers. As of March 31, 2004, average monthly fees were $57.10 and subscriber numbers were 1.56 million.|ret||ret||tab|

Now, Mediacom has 1.53 million subscribers and operates in 23 states, Copeland said. In the Springfield area, which also includes clients in Battlefield, Willard and Rogersville, the company has about 56,000 people signed up. Mediacom has about 175 local employees.|ret||ret||tab|

Beyond Springfield, Mediacom has Missouri markets in Columbia, Jefferson City and Excelsior Springs.|ret||ret||tab|

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Competition|ret||ret||tab|

Mediacom's strongest competitors are satellite TV companies, Copeland said. "They're certainly a fierce competitor. They seem to have unlimited dollars when it comes to advertising," he added.|ret||ret||tab|

And that advertising seems to be working. Both DISH Network and DirecTV have seen their numbers surge in the last two years.|ret||ret||tab|

DISH Network, for example, announced June 14 that it has passed the 10 million subscriber mark, and since 1999 it has been adding about a million customers every six to 12 months.|ret||ret||tab|

DirecTV surpassed the 12 million subscriber mark as of year-end 2003 and is aggressively adding local channels to its lineups. The company announced in January that Springfield was one of 18 DirecTV markets to add local channel availability in 2004.|ret||ret||tab|

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A stake in the outcome|ret||ret||tab|

While flat subscription numbers aren't great news for Mediacom, the city of Springfield also has a stake in the cable-vs.-satellite competition.|ret||ret||tab|

Mediacom has a franchise agreement with the city of Springfield under which it pays the city a franchise fee of 5 percent of its gross cable television revenues.|ret||ret||tab|

Franchise fees Mediacom paid to the city totaled about $1.2 million for the last 12 months, Copeland said.|ret||ret||tab|

That's about a quarter of the city's franchise fee revenue. In the budget for fiscal year 2004, franchise fee receivables for the city are budgeted at more than $4 million from 36 entities. This figure includes companies such as SBC, which pay on gross receipts, said Mary Mannix-Decker, acting director of finance.|ret||ret||tab|

While Mediacom receives income from subscribers hooking up to the Internet through its cable lines, it does not pay fees to the city from these receipts. That issue is held up in the court system, Copeland said, adding the company is still waiting on a final ruling. |ret||ret||tab|

The city and Mediacom disagreed on whether franchise fees applied to Internet usage and Mediacom stopped making payments. That decision has not been made final by the court system and the FCC as to whether that's collectible or not, according to Marilyn Day, contract administrator for the city of Springfield.|ret||ret||tab|

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