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Comcast Narrows Q4 Video Sub Loss to 17,000

15 Feb, 2012 By: Erik Gruenwedel

No.1 cable operator lost 460,000 video subscribers in 2011

Comcast Corp. Feb. 15 reported a fourth-quarter (ended Dec. 31) loss of 17,000 video subscribers — 87% fewer than the 135,000 video subs lost during the previous-year period. For the fiscal year, the Philadelphia-based No. 1 cable operator lost 460,000 video subs — 40% fewer than the 757,000 video subs lost in 2010.

Comcast ended the year with more than 22.3 million video subscribers, whose product mix includes pay-TV channels such as HBO, Showtime and Starz, as well as transactional and free video-on-demand content. Comcast had 22.8 million video subs in 2010.

The narrowed video sub loss is a good sign for Comcast, which, like other cable operators, has been losing subs due to the economy and, some would say, increased competition from lower-cost over-the-top video services such as Netflix, Hulu Plus, YouTube, Blockbuster Movie Pass and Amazon Prime, among others.

These OTT services require access to high-speed broadband, which underscores in part Comcast’s gain of 336,000 Internet customers in the quarter — up 15% from a gain of 292,000 customers in the prior-year period. For the year, Comcast gained more than 1.1 million Internet customers, compared with a gain of more than 1 million customers in 2010.

"[It was] our best video quarterly performance in almost five years," Comcast chairman Brian Roberts said in a call with analysts.

CEO Neil Smit said the improved video subscriber numbers reflected a stronger competitive posture, including product innovation and customer service. He said allowing subscribers to access content through its TV Everywhere Xfinity TV platform on portable devices has helped as well.

"I think we've seen sustainable results from those areas," Smit said.

Combined video, broadband and telephone subscribers topped 49.8 million in 2011, compared with more than 48.4 million in 2010. Regardless, the monthly average total revenue per video customer (ARPU) increased 7.1% to $141.24, reflecting a growing number of residential customers taking multiple products (i.e. video, telephone and Web), rate adjustments and a higher contribution from business services.

Comcast said 71% of its video subs took at least two products, and 37% took all three services, compared with 33% in 2010.

For the fourth quarter, cable revenue increased 4.7% to $9.5 billion, compared with $9.1 billion in the fourth quarter of 2010. This increase was driven by a 10.1% increase in high-speed internet revenue and a 36.8% increase in business services revenue. Video revenue increased 1.3% to $4.9 billion, compared with $4.8 billion in the prior year. For the fiscal year, video revenue increased 1.3% to more than $19.6 billion, compared with $19.3 billion in 2010.

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