Driven partly by a 35 percent uptick in the deployment rate of its next-generation X1 video platform, Comcast's (NASDAQ: CMCSA) video subscription losses slowed to 69,000 in the second quarter, the MSO's best second-quarter performance in nine years.
Cable communications revenue increased 6.3 percent, with X1 deployments reaching 30,000 installments a day. X1 deployments now account for a third of Comcast's triple-play customers, the company said. Comcast also attributed the uptick in its cable business to its ongoing $300 million effort to improve customer service.
"We very much believe in the video business and its place in the future," said Comcast CEO Brian Roberts.
During their call with investors, Comcast executives repeatedly beat the drum of the company's cloud-based X1 platform, which has enabled them to provide myriad self-diagnostic services, including a recently deployed feature that lets Comcast tech staff see and take over the video screens of consternated customers. Company officials also attributed the increased momentum of their cable business to improved customer service efforts, which include the hiring of 5,500 new service reps.
"Over the last year and a half, our churn numbers have improved every month," said Neil Smit, CEO of the Comcast Cable unit. "Part of that is driven by X1, and part of that is due to the higher percentage of our customers on contract. In short, we're getting better quality customers and retaining them longer. We keep driving on X1. We're just managing the customer relationship better. All the work we're putting into customer service is paying off."
On the broadband side of its business, Comcast saw Internet customer additions slow to 180,000 vs. 195,000 in the same quarter a year ago. Roberts said DOCSIS 3.1 deployments will begin late this year, "adding tremendous capacity and laying groundwork for future speed increases."
But the real boost to Comcast's bottom line came from the company's NBCUniversal division. Revenue from the NBCU division was up 20.2 percent in the second quarter, with the NBC network finishing first among major broadcast networks in the key 18-49 demo for the second consecutive season, and the Universal Pictures unit reaching the $5 billion mark at the worldwide box office faster than any movie studio ever has. As a result, Comcast's consolidated revenue increased 11.3 percent to $18.7 billion--Roberts said NBCU is on track to double its cash flow since Comcast first bid for the programming conglomerate back in 2009.
Meanwhile, Thursday's earnings report was the first for Comcast under new CFO Michael Cavanaugh, who took over for Michael Angelakis over the spring.
- visit this Comcast investor relations page
Comcast's next big move? Probably a stock buyback, not more M&A, analysts say
Comcast boosts revenue 2% to $17.85B but loses another 8K video subs in Q1
Comcast's NBCU turnaround complete as Universal Pictures breaks record with $5B box-office haul