January 23, 2019
Comcast Cable Jan. 23 disclosed it lost 344,000 pay-TV subscribers in 2018, which was nearly 85% more than the 186,000 subs lost in 2017.
In the fourth quarter (ended Dec. 31), Comcast lost 19,000 video subs compared to 38,000 subs in the previous-year period.
The losses underscore ongoing secular changes in the industry as consumers opt for alternative home entertainment distribution channels, including over-the-top video services such as Netflix, Amazon Prime Video and Hulu, and online TV platforms such as Sling TV and DirecTV Now.
Indeed, Xfinity X1, Comcast’s Web-based set-to platform, has added direct access to Netflix, Prime Video and YouTube to keep pay-TV subs.
The subscriber losses also impacted sales of digital movies and TV shows. Video revenue decreased 1.8% to $22.4 billion from $22.8 billion, primarily reflecting a decrease in the number of residential video customers.
Comcast, which doesn’t have standalone online TV or OTT video platforms, does benefit as one of the nation’s largest Internet service providers. The company added 1.23 million high-speed Internet subs in 2018 compared to 1 million net additions in 2017.
High-speed Internet revenue increased 9.3% to $17.1 billion from $15.7 billion, driven by an increase in the number of residential high-speed internet customers and rate adjustments.
Corporate CES Brian Roberts said he was pleased by the “strong” operational and financial results, including the 13th consecutive year of more than 1 million broadband net additions.
In addition, with the closing of the acquisition of British satellite TV operator Sky, Roberts said Comcast has transformed into a global company.
Indeed, Sky revenue increased 2.4% to $5 billion in the fourth quarter. Excluding the impact of currency, revenue increased 5.6%, reflecting higher direct-to-consumer, content and advertising revenue.
Direct-to-consumer revenue increased 4% to $4 billion, driven by improved product penetration for pay-TV, growth in Sky Mobile and Sky Fibre customers, as well as rate adjustments in the U.K.
The quarter’s average direct-to-consumer revenue per customer relationship increased by about 1%. Content revenue increased 35.7% to $363 million, primarily reflecting the wholesaling of sports programming, including exclusive sports rights recently acquired in Italy and Germany, increased penetration of premium sports and movie channels on third party pay-TV networks in the U.K. and monetization of our slate of original programming.
“[We] are excited about its future and the potential of our combined company in 2019 and beyond,” Roberts said in a statement.