Light Reading

Comcast Finds Sweet Spot With X1

Alan Breznick
4/22/2014
50%
50%

Comcast appears to have recaptured its old video mojo, thanks largely to its new X1 IP video gateways.

In another upbeat earnings call Tuesday morning, Comcast Corp. (Nasdaq: CMCSA, CMCSK) reported that it gained 24,000 video subscribers in the first quarter as it continued to deploy the X1 hybrid QAM/IP video gateways aggressively throughout its regions. That gain, reversing a loss of 25,000 video customers in the first quarter of last year, was the second straight quarterly increase for the largest US MSO after a losing streak of 26 consecutive quarters over the past seven years. (See Comcast Breaks Video Sub Skid.)

Comcast executives gave most of the credit to the X1, which gives subscribers a cloud-based user interface that offers a stark improvement over the legacy set-top box interface. The X1, now deployed in all Comcast systems, has helped cut the voluntary customer churn rate by 20-30% while boosting video viewing rates and on-demand, transactional, and advertising revenue, the executives said.

Calling the X1 "a game changer," Comcast chairman and CEO Brian Roberts said it "creates a really fantastic opportunity" to increase customer satisfaction, develop new services, and generate fresh revenue. "It's an architectural change that we haven't seen in a long time."

Delighted by the reception that the X1 has received from more than 7 million triple-play customers, Comcast officials said they're also offering the service to double-play customers. They have also stepped up deployments of the video gateways, installing an average of 15,000-20,000 boxes a day, double the rate of six months ago.

In another video highlight from the earnings report, Comcast said it increased the number of subscribers taking such advanced video services as HD and DVRs to 12.6 million. That represents 56% of its total 22.6 million video customers, versus 53% of the base a year earlier.

Yet Comcast still has more than 200,000 fewer video customers than it did a year ago, due to the heavy subscriber losses it endured last spring and summer. Its video totals are looking up again, but the company still faces an uphill climb to reclaim all the TV subscribers it has lost since 2007.

Weighed down by heavy video subscriber losses in 2013, when it shed more than 300,000 basic cable customers, Comcast barely eked out a year-over-year increase in video revenue for the first quarter. Video revenue climbed a mere 1.3% to nearly $5.2 billion as modest price increases more than offset the subscriber losses.

Overall revenue from Comcast's huge cable communications division rose 5.3% to almost $10.8 billion, due mainly to robust growth in the high-speed data, advertising, and business services sectors. In particular, business services kept up its stunning growth, surging nearly 24% to a record $917 million. At that pace, Comcast could become the first cable operator to eclipse the $4 billion annual commercial services revenue mark this year.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
smkinoshita
50%
50%
smkinoshita,
User Rank: Light Sabre
4/22/2014 | 6:32:59 PM
Re: Basic cable
@danielcawrey:  "One thing that Comcast is surely doing well in is providing broadband, especially business class. Almost every business today needs internet, and Comcast makes a ton of margin on selling upper tier internet services, primarily for use during workdays. "

I think you've hit the main point, Daniel.  Internet is becoming as standard as a phone number, and some businesses are oprating virtually to save on costs.  
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
4/22/2014 | 5:56:53 PM
Re: Basic cable
Didn't some of the video subs go to the telcos? Not a ton but some. 

I suspect most have gone to online viewing in response to ever-higher cable costs. 
danielcawrey
50%
50%
danielcawrey,
User Rank: Light Sabre
4/22/2014 | 2:53:26 PM
Basic cable
I wonder where all of those basic cable customers are going? Sure, some of them are getting Netflix or Hulu, but are some of them switching to satellite?

One thing that Comcast is surely doing well in is providing broadband, especially business class. Almost every business today needs internet, and Comcast makes a ton of margin on selling upper tier internet services, primarily for use during workdays. 
Flash Poll
From The Founder
Ericsson's Hyperscale Datacenter System (HDS) 8000, featuring Intel's Rack Scale Architecture, caused a stir when it was announced at MWC 2015. For more on this revolutionary product, join me on Thursday, April 30 at 12:00 p.m. EST for a Super Webinar event, A New Hardware Paradigm for the Telco Data Center.
LRTV Documentaries
CableLabs' Clarke Updates Cable Virtualization

4|23|15   |   05:41   |   (1) comment


Former BT exec now leading CableLabs' NFV and SDN efforts explains key role of open source and updates efforts to virtualize the home network.
LRTV Interviews
Ericsson's CTO Talks Transformation: Pt. II

4|23|15   |   08:19   |   (1) comment


In the second installment of an in-depth two-part interview, Ericsson's CTO Ulf Ewaldsson talks to Light Reading CEO and founder Steve Saunders about cultural change, network slicing and technology advances.
LRTV Interviews
Ericsson's CTO Talks Transformation: Pt. I

4|23|15   |   09:27   |   (3) comments


In the first installment of an in-depth two-part interview, Ericsson's CTO Ulf Ewaldsson talks to Light Reading CEO and founder Steve Saunders about the incredible transformation underway in the communications networking industry.
LRTV Documentaries
LTE Paves the Way for the 5G Revolution

4|20|15   |   4:20   |   (0) comments


Håkan Andersson, head of 5G product strategy of the Radio Business Unit at Ericsson, discusses the role of LTE, the US and other industry verticals in building a true 5G ecosystem.
LRTV Documentaries
The 3GPP's Road to 5G Standardization

4|17|15   |   4:43   |   (0) comments


Satoshi Nagata, chairman of the 3GPP's TSG-RAN group and a manager at NTT Docomo, explains the standardization process for 5G, as well as the biggest challenges and opportunities.
LRTV Documentaries
AlcaLu CTO Makes the Case for a New 5G Air Interface

4|16|15   |   3:54   |   (0) comments


Michael Peeters, CTO of wireless at Alcatel-Lucent, explains why 5G will require a new air interface to meet its diverse performance targets.
LRTV Documentaries
AlcaLu + Nokia: The New Uber-Vendor

4|15|15   |   2:42   |   (4) comments


Heavy Reading Senior Analyst Gabriel Brown discusses the technological and competitive opportunities and challenges if a merger between Alcatel-Lucent and Nokia comes to pass.
LRTV Huawei Video Resource Center
Huawei's Data Center Power Play

4|15|15   |   6:22   |   (0) comments


Huawei has developed industry-leading energy efficiency capabilities for its indoor and outdoor data center solutions, explains Dr. Fang Liangzhou, vice president of Huawei's Network Energy product Line.
LRTV Huawei Video Resource Center
Huawei’s Routers, Switches Get the Green Mark

4|15|15   |   2:02   |   (0) comments


TUV Rheinland's Frank Dudley explains how Huawei's routers and switches have been successfully tested by energy efficiency experts and have gained Green Mark Certification.
LRTV Documentaries
A Finn, a Frenchman & a Guy From New Jersey Walk Into a Merger...

4|15|15   |   3:17   |   (0) comments


Stop us if you've heard this one before... Light Reading CEO Founder & CEO Steve Saunders weighs in on the technical and cultural implications of a Nokia and Alcatel-Lucent merger.
LRTV Huawei Video Resource Center
Accounting for Better Solutions

4|10|15   |   02:31   |   (1) comment


Murad Yousuf, CTO at Saudi Arabia's Ministry of Finance (Dept. of Zakat & Income Tax), talks about the benefits of deploying router technology from Huawei.
LRTV Huawei Video Resource Center
What's in Store for Huawei & DataCore?

4|10|15   |   05:44   |   (0) comments


At the CeBIT trade show in Hannover, Germany, George Teixeira, CEO of software-defined storage (SDS) specialist DataCore Software, explains why he has just signed a partnership agreement with Huawei Technologies.
Upcoming Live Events
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
In its latest survey covering network operators' plans and strategies for ICT transformation, Heavy Reading asked telecom operators worldwide to identify the most important goals and objectives for their ICT transformation initiatives. Heavy Reading also asked operators about the importance of a "digital first" strategy, which enables customers to complete an interaction across different digital channels, such as web and mobile self-service and social media.
Hot Topics
What if the Comcast Merger Fails?
Mari Silbey, Independent Technology Editor, 4/20/2015
Google's WiFi-First Mobile Service 'Fi' Is Here
Dan Jones, Mobile Editor, 4/22/2015
Comcast Merger May Hinge on Hulu
Mari Silbey, Independent Technology Editor, 4/22/2015
Comcast Formally Ends Its Bid for TWC
Mari Silbey, Independent Technology Editor, 4/24/2015
Google Ready to Release Thousands of Loons
Sarah Thomas, Editorial Operations Director, 4/20/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Many leading communications companies can claim to have undergone significant periods of reinvention during their histories, but none have been through more major ...
Data Center Interconnect, or DCI, is one of the hottest sectors in telecom currently. Since coming back to Light Reading last year, prodigal-son style, I've ...
Cats with Phones
Learning Curve Click Here
Pierre could never remember how to use Excel.
Latest Comment