Still feeling the heat from telcos, satellite TV providers and other rivals, Comcast Corp. shed nearly twice as many video subscribers in the first quarter of 2013 than it did a year earlier, ending its nine-quarter streak of lower video losses.
In its earnings call early Wednesday, Comcast reported that it lost 60,000 video customers during the three months to the end of March, compared with 37,000 in the same period a year earlier. Most of the 60,000 losses were accounted for by video-only customers, of which Comcast now has about 5.5 million.
Company executives said they remain committed to reversing those losses and posting video subscriber gains again sometime in the near future.
They also stressed Comcast's video revenue and triple-play subscriber growth, as well as its rollout of such new IP video products as its next-gen X1 service.
Comcast officials blamed the sharply higher video unit losses on a mix of factors, including subscription rate increases for most of the customer base and higher set-top box rental fees for many customers. They also cited accounting changes in the way that multi-dwelling unit (MDU) subscriptions are billed.
But they conceded that the operator lost "a bit more primary video subscribers" [sic] than they did during the first quarter of 2012. [Ed note: A bit?]
Brushing those losses aside, though, Comcast executives emphasized that video revenue rose by 3.7 percent to more than $5.1 billion, the company’s highest video growth increase in four years, as more customers signed up for more advanced (and pricier) HD and DVR services. About 12 million Comcast customers, or 55 percent of its video base, now pay for such advanced services.
Comcast officials also highlighted the company's gains on the triple-play front. They boasted that 41 percent of the operator's video customers now take three services (video, data and voice), up 8 percent from a year ago. "We're getting a higher triple-pay sell-in," said Neil Smit, president and CEO of Comcast Cable.
Unlike their counterparts at Time Warner Cable, which announced last week that it's shifting away from triple-play sales due to churn concerns, Comcast executives said they will continue to plug the triple-play package because they believe it drives customer satisfaction and reduces subscriber disconnects.
"We’re still very focused on the triple play," Smit said. "Our triple-play customers churn at a lower rate … I think that triple play has still been a very effective program for us."
Comcast officials also remain very bullish about the company's new IP-capable X1 video service, which has been gradually rolling out throughout the U.S. during the past year. (See Comcast's X1 Comes to Colorado.)
Smit said X1, which is now available in about 30 percent of Comcast’s 50-million home footprint, will be available to 50 percent of that footprint by the end of June, with plans to extend the rollout nationwide by the end of the year.
Smit said Comcast has seen increases in both on-demand and HD viewing in the markets where X1 has already been introduced. He also said customer satisfaction rates have risen in those markets. "The X1 results are very positive," he said.
Continuing Comcast's tradition of showing off its latest video products at the Cable Show each spring, Chairman and CEO Brian Roberts said company officials will "demonstrate a next-gen version of X1" at next month’s show in Washington, D.C. Company engineers are now crafting a more advanced "X2" cloud-based, IP video guide that will feature more personalized recommendations. (See Comcast's 'X2' to Get Personal With the TV.)
— Alan Breznick, Cable/Video Practice Leader, Light Reading