Eurozone crisis hits pay TV: Punters pick broadband over telly
As Norway's GET cable company puts up a "for sale" sign, it demonstrates that the pay TV scene in Europe is starting to realise a home truth – and it may take something as big as the Eurozone crisis to prove it – that pay TV is NOT as resilient as broadband, which continues to grow in the Eurozone. You cannot apply for a job without broadband – how else are you going to send your CV – but you can cut the TV bill by taking a cheaper package and that pressure, usually referred to as cord thinning, is taking place.
This has been happening across Europe as ARPU's have tumbled, and despite there being a constant whining and moaning about cord thinning, there is no question that in at least some parts of Europe – and we're pretty sure this includes Norway – there is a lessening of pay TV spend, without anyone actually cutting off the relationship for good.
GET, of course, is a cable company, so has broadband, but it remains on around 370,000 pay TV homes and it has been up and down around this number for the past five years, unable to break through the 400,000 mark and stay above it. It doesn't produce public figures, but its parents are private equity group Quadrangle and Goldman Sachs Capital Partners, the merchant bank. They have clearly had enough, because there is no other reason to sell.
When they bought the business in 2007 from Candover, it was always assumed they would borrow money against the asset, upgrade the network and make most customers digital and get as many as possible onto broadband, and then sell it or take it public. Right now the prospects of either are fairly poor, and only cash-rich rivals, such as UPC – which once owned it in the early part of the noughties – are being thought of as likely to want to take GET on.
http://www.theregister.co.uk/2012/07/15/cable_assets_hit_market_too_early_as_euro_squeeze_takes_toll/
Cable TV is a racket.
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