December 9, 2019
Comcast may be the nation’s No. 1 cable operator, but doesn’t mean pay-TV remains the company’s primary focus.
Speaking Dec. 9 at the UBS Global TMT Conference in New York City, CFO Brian Cavanagh said ongoing changes in the linear TV market and consumer migration to over-the-top video have resulted in changing corporate priorities.
“We are well in-stride on the idea that yes, video is important,” he said. “We make money in video. And it’s important to our customers, our legacy and investments we’ve made to X1.”
At the same time, Cavanagh said that while Comcast remains well-positioned to provide video through the traditional cable bundle, given the rise in streaming video, he said the company would stop attempting to provide the “full video experience” across the board and expect to make money doing so.
Comcast has lost more than 500,000 pay-TV subscribers this year.
“We want to give customers choices,” Cavanagh said. “We’re not going to chance unprofitable relationships, but rather give consumers choices where we maximize what we perceive the lifetime value of the relationship is to us.”
In other words, Comcast will no longer market expensive pay-TV bundles to consumers distracted by loss-leading OTT services such as Netflix, Disney+ and Hulu.
Indeed, as Comcast Cable continues to hemorrhage pay-TV subs, the company is focusing on broadband as one of the nation’s largest ISPs.
Comcast added 379,000 high-speed Internet subscribers in the most-recent fiscal period, up 13.4% from 334,000 net broadband additions in the previous-year period.
“The focus is always going to be broadband,” Cavanagh said. “And that might not have been what we said five years ago. It’s about attaching products where you can make incremental money and/or add stickiness.”
The CFO said pay-TV churn (subs renewing service) is under control in markets where the cloud-based X1 is deployed. But the company’s goal of having a video product in every household has changed.
“Customer satisfaction goes up if you give them the product they actually want. And broadband [not pay-TV] is that in all cases,” Cavanagh said.