When it comes to cable TV, there are numerous firms that you may not be aware of yet are critical to how cable TV operates.

Harmonic Inc is one of these companies, and it manufactures many of the critical pieces of equipment that enable cable TV to function.

Harmonic Inc posted earnings today, and revenue for its video section was down 19.5% year on year. This comes as Harmonic’s broadband internet business, which accounts for 60% of company sales, continues to grow. This is a huge cry from when video dominated their industry.

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Now, the corporation is reviewing its video business to determine what to do with it. It is also considering selling the video business.

“We have initiated a formal strategic review process for our Video business after careful consideration of the growth opportunities in both our Broadband and Video SaaS businesses, as well as our capital allocation priorities over the next several years.” We are evaluating a variety of solutions for the Video business with financial and legal consultants in order to better position Harmonic for long-term shareholder value generation. Several parties have expressed interest in our Video business as part of this process over the last several months. We are conservatively forecasting our Video business for Q4 2023 because the strategy review may create considerable interruption.” According to a press statement from the corporation.

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During its results call, the company went on to disclose that it already had many interested parties wanting to buy its video business.

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This is a major red flag for the overall state of cable television. One of the primary participants in traditional cable TV gear is stating unequivocally that this market is no longer profitable. On the other hand, their streaming business expanded rapidly as it focused more on equipment used to stream live sporting events. Revenues from streaming increased by 42% year on year. Unfortunately, this expansion was insufficient to compensate for the deterioration of its core cable TV business.

As more cable TV companies transition to streaming, the data from Harmonic provide a good indication of the general state of the industry.


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