Comcast has dramatically slowed the loss of video subscribers over the past several quarters, as it rolls out new products and new ways to access its content. At the same time it has strengthened broadband subscriber growth, with more of its customers opting for double- and triple-play offerings.
In its third-quarter earnings report, Comcast said it lost 165,000 video subscribers in the quarter. That might sound like a lot, but it’s a 40 percent improvement over the previous third quarter and is part of a general slowdown in customer attrition over the past several quarters. Comcast attributes much of that improvement to offering better products in the video segment — including a wider range of video-on-demand offerings and available TV Everywhere content on its XfinityTV.com video portal and associated mobile applications.
Comcast is likewise benefiting from higher marketing spend and more targeted marketing, as well as improved retention rates. Part of its improvement is also due to better branding, according to Comcast Cable President Neil Smit. On the earnings call, Smit said the company was offering better products, better content and better guides with its Xfinity TV apps. He also said the Xfinity brand has proven strong, with non-customer consideration at about 45 percent.
Meanwhile, broadband customer growth continued to ramp up. Comcast added 261,000 high-speed Internet customers in the third quarter, which is an improvement from 249,000 a year prior. Growth in the broadband arena comes as the company increases the number of customers taking double- or triple-play offerings. Comcast CFO Michael Angelakis said 70 percent of the company’s video subscribers sign up for two or more services. But the number of broadband-only subs was also slightly up; Smit said that the number of subscribers who paid for high-speed Internet only was in the 10–15 percent range and had ticked up slightly over the past quarter.
Overall, Comcast revenues grew 51 percent year-over-year to $14.3 billion, thanks to the addition of NBC Universal assets it picked up earlier this year. Earnings were up 6.5 percent to 33 cents a share, and free cash flow grew 35.8 percent to $1.4 billion. Revenues were up 5 percent to $9.3 billion on the cable side of the business, and NBC Universal revenues increased 4.6 percent to $5.2 billion.
For Comcast, improved results on both the video and broadband sides of its business is happening as the overall industry faces an economic slowdown that is forcing consumers to cut back on expenses. That has led at least one analyst to question the ability of customers to continue paying increased rates for cable products. But for now, at least, Comcast appears to be weathering the storm.