Comcast Posts 3Q Income, Video Sub Declines27 Oct, 2010 By: Erik Gruenwedel
Comcast Corp. Oct. 27 reported third-quarter (ended Sept. 30) net income of $867 million, down 8.2% from net income of $944 million during the same period a year ago.
The nation’s largest cable operator said it lost 275,000 basic video subscribers, more than double the number of video subs lost last year. It has lost 622,000 video customers year-to-date, compared with 424,000 video subs last year.
“The housing market is still weak and unemployment remains high, which we believe continues to impact many consumers,” said CFO Michael Angelakis in a call with analysts.
Multiservice operators (MSOs), including cable and satellite operators, have reported year-to-date declines in video subscribers as households scale back on premium channels during the recession.
Comcast, which also attributed the increased churn to the end of a promotional pricing plan, said 42% of the lost video customers were basic subscribers, who generated lower average monthly revenues.
During last year’s digital transition from analog, Comcast offered 12-month promotional pricing plans, which expired during the quarter.
While video usage declined, Comcast increased the number of subscribers using high-speed Internet and telephone services, thereby increasing average revenue per subscriber.
When asked how the company planned to deal with a recent report that claimed Netflix streaming accounted for 20% of all primetime TV viewing (8 p.m.-10 p.m.), Comcast president Neil Smit said increased rollout of Xfinity TV should counteract that trend.
“We’ll continue to monitor that,” Smit said.
Indeed, Comcast Oct. 27 announced it would make available to Showtime Networks subscribers free online access (at XfinityTV.com) to 400 hours of repurposed original series, including “Dexter,” “Weeds,” “The Big C” and movies Inglourious Basterds and The Reader, among other content.
During the quarter, Comcast spent $21 million on legal and related fees in regards to its proposed $30 billion majority acquisition of NBC Universal, which is expected to close by the end of the year.
Overall revenue increased 7.2%, to nearly $9.5 billion from $8.8 billion last year.