Cable companies appear to have found the perfect antidote to cord-cutters — jack up the price of broadband.
Cablevision on Thursday reported a 6 percent rise in broadband revenue — even as it lost customers.
Comcast reported a 9.6 percent increase in revenue from broadband in the third quarter — outpacing the rate of customer increases.
Subscribers are getting hit with the price increases just ahead of a sea change in how media companies deliver their programming.
Broadband bills now run between $50 and $70 a month for standalone service.
Media giants like CBS and Time Warner's HBO are getting ready to launch streaming versions of their programs — a move that could spark further cable-TV cord-cutting but will also make a high-speed broadband connection all the more valuable.
The third quarter saw the biggest percentage increase in broadband uptake in nearly two years, rising 3.8 percent, or by 798,000 subscribers.
Comcast and Time Warner Cable combined accounted for half the total increase, adding 423,000 broadband subscribers in the period.
The two cable neighbors are hoping to get their $45 billion merger green-lighted by officials early next year.
At Cablevision, executives, led by CEO James Dolan, are selling the Street on a strategy of focusing on profitability over growth — even while it lost both video and broadband subscribers.
The Bethpage, NY, cable operator added $20 million in revenue from high-speed data versus the year-ago period even while it lost 23,000 broadband subscribers. The company already has more broadband customers than video subscribers (2.756 million versus 2.715 million), though video revenue was $800 million in the three months to Sept. 30, while broadband is still small at $356 million.
But broadband revenue could very well grow faster than pay-TV revenue.
After all, in addition to HBO rolling out a new over-the-top offering, both Dish and Sony are putting together online programming packages.
Already in the market are: Netflix, Hulu, Amazon, MLB, WWE and CBS, with many more to come.
When asked how Cablevision intends to grow, Dolan told analysts, "We're going to see a re-stratification of the cable business .… One thing we see is significant uses of data, increasing exponentially. We think that's where the growth is going to come from."
Dan Cryan, research director for digital at IHS, told The Post that revenue from US broadband providers in 2014 is expected to top $49 billion, up from $42.1 billion in 2012.
Cryan says broadband ARPU (average revenue per user) has grown to $45 per month this year from $41.25 in 2012. The prices reflect discounts from triple play packages.
"Broadband is strategically more important than the number of subscribers indicates because it has the potential to be higher margin," Cryan said.
Plus, he added, "You don't have to pay carriage fees."
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