Comcast’s Solution to Video Sub Losses: Raise Broadband Pricing

Comcast Cable lost 96,000 video subscribers in the first-quarter (ended March 31), and 200,000 subs in 2017 — many to competing over-the-top video services and/or online TV platforms.

So, what is Comcast Cable doing in response to cord-cutters? Raising broadband (high-speed Internet) fees, CEO Dave Watson told an investor group.

Speaking May 14 at the MoffettNathanson Media & Communications Summit in New York, Watson reiterated that the traditional cable bundle still represents the best value to consumers eyeing a-la-carte programming alternatives such as Showtime OTT, HBO Now, Netflix, Amazon Prime Video and Hulu, etc.

When pay-TV subscribers opt for OTT video alternatives, they lose the multiproduct discount, while Comcast is able to lower its programming costs, while hiking monthly broadband fees.

Indeed, Comcast added 379,000 high-speed Internet subscribers in Q1, which helped upped broadband revenue 8.5% to $14.8 billion — 64% of video revenue.

“We’ve seen some low-end customers that have dropped video, maintain broadband … it’s accretive when that happens,” Watson said.

The executive said Comcast’s cloud-based X1 set-top continues to meld the traditional set-top with OTT video. The platform, which accounts for almost 60% of Comcast’s residential video footprint, now offers direct-access to Netflix and YouTube.

“We still think video is a very important category,” Watson said. “We’re still going to compete.”

At the same time, Watson concedes that competing streaming media set-top dives such as Roku offer similar features of X1, including the Xfinity app.

“We have a lot of optionality around how we manage the video relationship,” he said.

 

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