[rayiner]

A better example is probably Charter, which doesn't have the noise of the media/movie business: http://phx.corporate-ir.net/phoenix.zhtml?c=112298&p=irol-re.... Look at page 54 of their 2013 10-K.

Their revenues were $8.15 billion (just over $100 per customer, for the whole year). $5.35 billion in operating costs, and $1.85 billion in depreciation and amortization (the loss in value of the capital in the ground). $925 million in net income on that revenue (11%).

What's really shocking is that their revenue per customer relationship is under $130 per year. That's the result of something else pundits ignore: cable company franchise agreements require them to build out to neighborhoods where many subscribers just get basic cable, which is usually subject to a regulated rate of just $10-20 dollars/month.

Looking at just the ISP business makes the numbers look worse. $4 billion of the revenue is from video, while $2 billion of the costs are for programming (see page F-10). If you take out the video revenue, you're down to $4.15 billion in revenue, with about $5.15 billion in expenses (i.e. you're losing a billion dollars a year).

Ultimately, of course, after paying interest on debt Charter lost money for the year. The idea that cable companies are wildly profitable is an HN myth.

[tanzam75]

> Their revenues were $8.15 billion (just over $100 per customer, for the whole year). ... What's really shocking is that their revenue per customer relationship is under $130 per year.

You seem to be an order of magnitude off on your ARPU calculations. $8.15 billion in revenue (p. F-4) / 5.9 million customers (p. 1) = $1,381 ARPU

Either that, or you're mixing up monthly with annual. On p. 4, they calculate their monthly revenue per residential customer relationship at $108.

However, you are generally correct that the cable business is a tough business to be in. Lots of labor costs, lots of capex, lots of interest costs. On an ROA basis, they're not doing that much better than the regulated utilities.

[rayiner]

You're right, I was looking at the Table on Page 4, which lists revenue per customer relationship at $107.97. That must be per month, not per year.

[digikata]

These numbers should also say something to free market advocates that dream of multiple companies installing redundant infrastructure to compete for customers.

[wmf]

I think the "myth" comes from attributing almost all costs to the video side which results in conclusions like $4.15B Internet revenue with minimal costs == all profit.