Comcast (Nasdaq: CMCSA) continued to lose basic video subscribers--about 275,000 of them, in fact--during a third quarter where its net income dropped 8.2 percent to $867 million on sales that were up 7.3 percent to $9.4 billion. The subs that stayed, incidentally, paid 10 percent more for service, averaging $129.75 per month.
The subscriber loss reflects what's happening around the cable space and could be laid to four factors: the economy, the flagging housing market, rate increases and, perhaps most importantly, the digital transition. Around this time last year over-the-air viewers faced with losing analog broadcast signals flocked to pay TV services like Comcast, which welcomed them with open arms and special deals. The deal terms ended and the subscribers flocked away.
"That happens sometimes with promotions but there was an awful lot of that happening in the second (quarter) and the beginning of the third quarter," said Comcast Chairman-CEO Brian Roberts, speaking to analysts and the media during the company's earnings call.
Comcast Cable Communications President Neil Smit, while not exactly offering to chase down each and every fleeing sub with a new offer, suggested that an increased "marketing spend" delivered "a positive connect trend so the customer base was responding to our offers" during the quarter. There will, however, be no such thing as cheap Comcast cable, he promised. "I don't believe in overly discounting the product but more looking at the value of the services that we're offering."
Smit said that there are no signs that the customers are giving up cable for over-the-top services.
"All our active surveys have seen almost not (OTT) impact," he said. "We have seen customers who are disconnecting and not going to a competitor (but) that small number of customers appear to be going over-the-air more than any over-the-top impact."
- see this news release
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