Comcast Cable drives 5.1% revenue gain in Q3 despite video customer losses of 125K

Comcast (Flickr user Mike Mozart)
Video performance didn’t end up quite as bad as Comcast’s September disclosure that video losses could hit 150,000.

Comcast said it lost nearly 125,000 pay TV customers in the third quarter but still managed to increase revenue in its cable division by 5.1%.

As is typical in the cable business, video was usurped for Comcast by two increasingly relevant revenue streams: Residential broadband revenue was up 8.9% as high-speed internet customers increased by 214,000. And business services revenue increased 12.6%. 

But video performance wasn’t quite as bad as the high end of Comcast’s September disclosure; the company said then that video losses could hit 150,000 with hurricane disruption and OTT competition in the third quarter. Comcast attributed only 20,000 of the 125,000 lost subscribers to the hurricanes. Analysts had pegged total losses at around 132,000.

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Comcast said its X1 video platform has now reached 57% penetration within the operator’s footprint. Comcast CEO Brian Roberts said that despite the subscriber losses, X1 continues to drive down churn not only for Comcast but also for Cox, Rogers, Shaw and Videotron, which are the cable companies that license the technology. 

“Look at the overall market performance of video. For us to come in only half a [basis] point [down in subscribers], that’s very different. And that’s driven by X1,” Roberts said. 

Broadband only: Roberts conceded that Comcast’s growing number of broadband-only customers are more profitable. “Margins improve on standalone broadband,” he said. “To the extent someone does take broadband only, we take a very disciplined approach to a premium product. We will keep raising speeds for them, but we will charge more on a standalone basis.”

Wireless growth: Roberts added that Comcast’s primary objective is still to bundle “best-in-class services.” Comcast revealed that it now has 250,000 users for its nascent wireless service, which was launched over the spring. “We’re using wireless to help our very valuable broadband business,” Roberts said. “You can only get wireless if you take broadband.”

Olympics hangover: In reporting performance of its increasingly profitable NBCUniversal division, Comcast faced the unfavorable prospect of having to compare the most recently completed quarter to a period in 2016 during which it sold Summer Olympics advertising. NBCU revenue decreased by 12.7% year over year with the Rio Olympics included, but revenue increased by 6% with the Olympics factored out. 

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