Millennium Digital Media (No. 41 on the BE INDUSTRIAL/SERVICE 100 list with $102.3 million in sales) recently signed an agreement to sell roughly 75,000 of its cable subscriber accounts to Wave Division Holdings L.L.C., an Internet and phone services company in Kirkland, Washington, for an undisclosed sum. The sale, which was valued at $150 million to $200 million, represents about two-thirds of Millennium’s subscribers.
Millennium, a St. Louis-based provider of cable television and telecommunication services, will retain about 44,000 cable subscribers in Anne Arundel County, Maryland. The agreement lists a total of about 75,000 subscriber accounts in Washington, Oregon, and Michigan.
Millennium’s revenues have remained relatively flat over the past several years, dipping from $106 million in 2003 to $102 million in 2005. Peter Smith, senior vice president of marketing at Millennium, readily dismisses the notion and maintains that the move to sell the cable systems is a sound and standard business decision.”We have every intention of remaining in the cable TV business for a long time,” he says.
Adi Kishore, a senior analyst in media and entertainment strategies at the Yankee Group Research Inc. in Boston, says the competitive pressures in the market and the need for size in order to remain competitive are becoming more apparent.
“Even if this cable company becomes smaller, leaner, and more efficient, that still may not be enough to keep it around in the long run,” he says.