• by Joe Mandese  @mp_joemandese, August 10, 2004

Two of the largest cable TV companies, Cablevision Systems and Charter Communications, Monday reported higher-than-expected losses during the second quarter of 2004, despite rapid growth in broadband subscription revenues. And in an especially alarming note, Charter revealed a pronounced erosion of subscribers, though Cablevision managed a modest subscriber gain.

The subscriber developments are particularly noteworthy, because cable TV operators reap most of their revenues from subscriptions. Though the industry has aggressively stepped up its advertising sales efforts in recent years, advertising remains a relatively small source of cable operator revenues.

While Charter recorded a 9 percent increase in advertising sales during the second quarter, at just $73 million advertising accounted for only 5.9 percent of Charter's $1.239 billion in second quarter sales. Through the first half of 2004, Charters advertising sales were up 6 percent to $132 million, but represented only 5.4 percent of total first half revenues of $2.453 billion.

Similarly, Cablevision reported a relatively healthy gain of 24 percent in second quarter advertising sales, but at $26 million advertising accounted for only 3.6 percent of total second quarter revenues of $730 million.