• by Wayne Friedman , September 12, 2011

Although cable system operators have combated new technologies and services over the last several years, they have continued to grow higher per-subscriber revenue and steady cash flow.

Over the last four years, revenues at seven Multiple System Operators have risen at an annual rate of 7.3% to $70.95 billion from $53.57 billion in 2006, says media researcher SNL Kagan.

Plus, operating cash flow -- a key factor of financial health -- has grown 8.3% to $27.78 billion in 2010 from $20.19 billion in 2006. The report says 2010 was the first time all the MSOs were free cash-flow positive.

The MSOs include Comcast, Time Warner, Cablevision, Charter, Insight, Mediacom and Suddenlink.

Despite competition from alternative video services, digital phone/ Internet and other business, profit margins continue to be in the upper 30% range. Average cash flow was 39.9% for the seven companies in 2010 -- up from 37.7% in 2006.

SNL Kagan says growing pressure continues to come from rising programming expenses -- both from cable network and retransmission costs.

It adds that programming expense growth has been somewhat offset by the non-video businesses -- phone and Internet, which are high-margin operations -- as well as from rising ad revenues.

Cable operators have seen continued erosion in their traditional cable video businesses.