Comcast Loses 500K Subs in 200818 Feb, 2009 By: Chris Tribbey
The recession is hurting Comcast, as the nation’s largest cable company loses customers who’ve lost their homes or tightened their belt by cutting their cable service, the company said Feb. 18.
Reporting its fourth-quarter (ended Dec. 31) earnings, Comcast said it lost more than a half-million cable subscribers in 2008, nearly half of those in the fourth quarter. The company earned a net profit of $412 million during the quarter, down more than 30% from the same period in 2007. Revenue was up 9% to $8.8 billion.
“Total video, high-speed Internet and digital voice customer net additions slowed to 290,000 in the fourth quarter, a slowdown from prior quarters reflecting the impact of a weakening economy across all of our services and increasing competition in video,” said Comcast CFO Michael Angelakis in a conference call with investors. “The weak economy is impacting the consumer particularly on housing growth, vacancies and moves, providing us with fewer opportunities to sell new services.”
COO Steve Burke said that in terms of VOD, Comcast is streaming more than 300 million videos a month, but not much revenue is being brought in from the service, as the Internet’s free video offerings remain attractive to consumers.
“In terms of the overall VOD business the majority of very attractive product that people are getting on sites like Fancast and Hulu … a huge amount of that is already on our VOD platform,” he said. “The interesting thing is the programmers are very sensitive to the fact that the affiliate fees that the cable and satellite industry pays are really the most attractive part of their business. Most of them are not making very much money, if any money at all on the Internet.”
Shares of Comcast were down about 5% at trading close Feb. 18.