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Cable Technology Feature Article

April 30, 2009

Comcast Reports Gains: Still No Evidence of Video Cord Cutting

By Gary Kim, Contributing Editor

Comcast reported first-quarter 2009 revenue up five percent year over year to $8.8 billion, operating cash flow up eight percent to $3.4 billion and operating income higher16 percent to $1.8 billion.
Monthly average total revenue per video customer increased eight percent from $106.70 to $115.27. Comcast (News - Alert) lost two percent of its video customers, compared to the same quarter of 2008, but grew high-speed access customers eight percent and digital voice customers 33 percent. Revenue generating units were up six percent.
One likely conclusion, though reporting by the satellite companies hasn't yet occurred, is that U.S. consumers are not cutting off their video subscriptions as an economy measure, though there has been much speculation about it.
Comcast lost 78,000 video customers. Time Warner Cable added a net 36,000 video subscribers. That's a net loss for the two cable providers of 42,000.
AT&T added 284,000 net new video customers, while Verizon Communications added 299,000 net new video customers. That's a net gain for the two telcos of 583,000 video accounts.
Looking at the four companies overall, there was a net addition of 541,000 video accounts. So it would seem the argument in favor of video "cord cutting" has no legs. But there are two other possibilities. It might be the case that one or both major satellite video providers have lost more than 541,000 customers between them in the last quarter.
Though that seems unlikely, it would explain wired video growth at three of the largest companies while at the same time hiding a net loss of video customers overall. The other explanation is that the "losses" have occurred at some cable companies that have not yet reported, or at some rural telcos.
Given the relative magnitude of rural telco video subscribership and the "need" to account for well more than 541,000 lost customers, it seems unlikely that rural telco video customer loss could possibly outweigh gains by AT&T (News - Alert), Verizon and Time Warner Cable.
We'll have to wait for reporting from DirecTV (News - Alert) and Dish Network to confirm what actually happened. But so far, at least, there is very little evidence that the recession has done much other than slow growth rates for any of the leading cable and telco providers.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Stefania Viscusi