Comcast Loses Record 477,000 Pay-TV Subs in Q2; Adds Most Broadband Subs in 13 Years

As expected, Comcast legacy cable pay-TV business represents a widening economic fissure, losing 477,000 pay-TV subscribers in the second quarter, ended June 30. That was more than double the 224,000 video subs lost in the previous-year period. The cable giant has lost more than 1.2 million video subs in the past 12 months as consumers increasingly turn away from linear TV to over-the-top video distribution, including SVOD and AVOD.

Offsetting the video losses is high-speed Internet, which counts Comcast as the largest ISP in the country. With high-speed Internet a prerequisite for OTT video, Comcast had the best second quarter high-speed Internet net adds in 13 years, adding more than 340,000 broadband subscribers compared with 182,000 in the previous-year period. That does not include more than 600,000 free “Internet Essentials” customers that are receive service during the coronavirus pandemic, but were not included in reported results because they do not pay for the access.

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Comcast has added more than 1.6 million broadband subscribers in the past 12 months, to end Q2 with 29.4 million subscribers.

“We are optimistic about the runway ahead,” Comcast CEO Brian Roberts said on the fiscal call.

Spotify Launches on Comcast’s Xfinity X1, Xfinity Flex

Comcast June 22 announced that Spotify is now available to stream on cloud-based Xfinity platform, affording subscribers the ability to listen to the audio streaming service’s 50 million music tracks and podcasts directly on the TV.

Broadband-based Xfinity Flex subs can access Spotify with their Xfinity Voice Remote. Spotify will begin rolling out to X1 subs today over the Internet, and be available to all subs in the coming days, alongside all of the live, on demand, and streaming content.

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Comcast said it has seen double-digit growth in streaming music consumption this year versus the same time last year. Spotify is seeing the same trends from their end — the increase in working from home is showing that more users are now streaming music on their TVs.

“Music streaming on Xfinity X1 and Flex is at an all-time high and … alongside the growing catalog of entertainment already available on these platforms, adds even more great value to their Xfinity service,” Rebecca Heap, SVP of video and entertainment for Comcast Cable, said in a statement.

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New Spotify subs will be able to create an account directly on the device and immediately have access to the free, ad-supported version of the service. Spotify joins other music and listening streaming services already available on X1 and Flex, including Pandora, Amazon Music, Radio.com, iHeartRadio, XITE, NPR One, Music Choice, Stingray Music and Baeble.

CFO: Comcast Looking at Near 400,000 Video Sub Loss in Q2

The NBCUniversal Peacock streaming video service can’t come fast enough. Comcast Cable is expecting the same quarterly pay-TV subscriber loss in the second quarter (ending June 30) as it had in Q1: more than 388,000 subscribers dropping service.

That’s the projection Comcast Corp. CFO Michael Cavanaugh revealed June 16 during the virtual Credit Suisse Communications Conference.

“We’ve seen a lot of consumption of television, but a continued shift to streaming,” Cavanaugh said. “Our expectation is that the amount of spread [pay-TV sub losses] year-over-year will be about the same in the second quarter versus a year ago as it was in the first quarter.”

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Cavanaugh said the sub loss isn’t a surprise in light of ongoing consumer migration toward over-the-top video from the traditional cable bundle. He said the previous business model around channel bundles has been supplanted by high-speed Internet, data and video distribution.

“Today, we look at video as important because it’s a customer need and because we’re the broadband provider … helping in an ever more streaming world and helping customers navigate the video that they choose to buy,” he said.

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Cavanaugh said the days of forcing consumers to purchase bundles of content they may not watch are over.

“We’re not going to force it upon you if you don’t choose to see it that way,” he said.

To quell pay-TV drain, Comcast, through its cloud-based Xfinity platform, has pushed toward melding linear TV offering with over-the-top distribution such as Xfinity Flex, which enables subs to stream more than 10,000 free movies and TV shows, access services such as Netflix, Amazon Prime Video, HBO and Showtime, and rent or purchase movies and shows.

NBCUniversal launches its subscription/ad-supported Peacock streaming service nationwide on July 15.

“With impact on cord cutting, where we’re going with Flex in the cable business,” Cavanaugh said. “When combined with a voice remote, we think its very powerful, a platform attached to the broadband product.”

“I think there are a lot of pieces of our pre-existing [pay-TV] strategies and the momentum we had going into all this that I think is making us feel pretty confident in the future.”

Comcast reports Q2 results on July 30.

HBO Max Generates Underwhelming 87,000 First-Day App Downloads

HBO Max, WarnerMedia’s high-profile SVOD platform, generated about 87,000 app downloads on portable devices, according to new data from Sensor Tower. While the tally doesn’t include migration of HBO and HBO Now subs to the new platform, it still is significantly below the 300,000 app downloads upstart Quibi generated on its first day April 7.

Distribution is key to over-the-top video penetration, and HBO Max didn’t quite have all its channels lined up when it launched service on May 27. Notably missing: Amazon Prime Channels, Roku and Comcast Xfinity.

Later in the day, Max parent WarnerMedia announced it had come to an agreement with Comcast enabling Xfinity and Flex subs to access Max (separate subscription required). This was a big deal since Comcast Cable has more than 20 million video subs and its own competing Peacock SVOD/AVOD service.

Regardless, Max desperately needs as many distributors as possible to stay competitive in the subscriber numbers game with Netflix, Disney+ and Hulu.

“We’re thrilled to cap off the excitement of today’s launch by adding Comcast’s Xfinity to our roster of distributors who are now offering HBO Max to their customers,” Rich Warren, president of WarnerMedia Distribution, said in a statement. “This deal marks another important step in the distribution of HBO Max and provides millions of Xfinity customers with access to the product.”

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Max still lacks distribution through Amazon Prime Channels and Roku — both traditional must-haves for generating OTT subs if the service is going to reach 50 million subs without cannibalizing existing HBO Now, Go and pay-TV subs. Former HBO CEO Richard Plepler acknowledged Amazon was key to HBO Now generating 50% of its 8 million subs.

An Amazon spokesperson said that AT&T’s decision to bypass Prime Channels hurts HBO subs.

“We believe that if you’re paying for HBO, you’re entitled to the new programming through the method you’re already using. That’s just good customer service and that’s a priority for us,” Amazon said in a statement.

Ultimately, financial and data issues beneficial to all parties drive OTT video distribution deals via third part platforms such as such as Prime Channels, Roku and Apple TV+ Channels.

“Unfortunately we haven’t reached agreement yet with HBO Max,” Roku said in a statement. “While not on our platform [with 40 million subs] today, we look forward to helping Max in the future successfully scale their streaming business.”

Rebecca Heap, SVP of entertainment at Comcast Cable, said Max offers X1 and broadband-only Flex subs added content depth, including live content.

“We look forward to partnering with WarnerMedia to integrate the HBO Max app on our platforms alongside close to 200 other streaming services — all searchable with the award-winning Xfinity Voice Remote,” Heap said in a statement.

Comcast’s Xfinity ‘Watchathon Week’ to Feature Hulu Originals

Comcast Cable’s annual Xfinity “Watchathon Week” pay-TV smorgasbord is slated for May 11-17 featuring more than 10,000 free TV shows and movies from more than 70 networks and streaming services, including, for the first time ever, Hulu originals such as “Little Fires Everywhere,” “Ramy,” “Shrill” and “The Handmaid’s Tale.”

Other original programming includes Epix’s “Godfather of Harlem” and “Belgravia”; Starz’s “Outlander,” “Power,” and new series “Hightown,” and Showtime drama “Billions”. Programming will be available across Xfinity platforms including X1, Flex and Xfinity Stream.

New this year, X1 customers can tune into an Xfinity Watchathon Week Channel featuring free programming across providers curated by Xfinity’s team of editors. The channel can be accessed within the guide on channel one.

Launched in 2013 as an antidote to streaming services such Netflix and Amazon Prime Video, “Watchathon” affords Xfinity subscribers free access for one week to practically every major TV show and recent movie.

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“With so many customers still at home, we’ve not only seen a 50% increase in Xfinity On Demand viewing across genres of programming from drama and comedy to reality, but we’re noticing other interesting trends like a more than double-digit growth for discovery-related voice commands such as ‘what to watch’ and ‘surprise me,'” Rebecca Heap, SVP of video and entertainment, said in a statement.

Comcast Lost 409,000 Video Subs in Q1

The hits keeps coming for pay-TV regardless of a pandemic.

Comcast Cable April 30 reported it lost 409,000 video subscribers in the first quarter (ended March 31), which included 22,000 business accounts. That compared with 121,000 subs lost in the previous-year period, including 14,000 business accounts.

The sub losses underscore ongoing shifts how consumers watch television and stream video, including alternative channels such as online TV and subscription video-on-demand.

The cable operator ended the quarter with 19.9 million residential video subs — down 952,000 subs from the same period in 2019. It finished the period with 944,000 business subs, compared with more than 1 million during the previous-year period.

Fortunately, Comcast is the largest Internet Service Provider in the country, underscored by the addition of 477,000 broadband subs in the quarter — up from 375,000 high-speed Internet sub additions last year. Comcast ended the period with 29.1 million broadband subs compared to 27.5 million subs last year.

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Video revenue was consistent with the prior year period, due to an increase in average subscription rates, offset by a decline in the number of residential video subs. Advertising revenue was consistent with the prior year period, primarily reflecting an increase in political ad revenue, offset by reduced advertiser spending due to the coronavirus. Excluding political ad spending, advertising revenue decreased 4.6%.

“While parts of our business have been more impacted by COVID-19 than others, we have continued to innovate,” CEO Brian Roberts said in a statement. “We are distributing our content in new ways, as evidenced by the recent launch of [streaming video platform] Peacock on Xfinity X1 and Flex.

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Roberts said a strong balance sheet, portfolio of assets, and “world-class” management team would help Comcast to grow and succeed through the virus pandemic.

“This is a moment in time; and when it passes, I am very confident that the decisions we are making now will enable us to emerge from this crisis as a healthy, strong company,” he said.

NBCUniversal Bows Peacock Streaming Service to Comcast Xfinity/Flex Subs on April 15; Possible Expedited Nationwide Launch

NBCUniversal April 15 begins offering its branded Peacock streaming service to Comcast Cable Xfinity/Flex subscribers. Programming will include catalog TV shows and movies, including former NBC standouts, “Parks and Recreation,” “30 Rock” and “Law & Order: SVU,” the entire “Saturday Night Live” catalog, and Universal Pictures movies Jurassic Park, E.T. and Schindler’s List, among others.

The Peacock app will be available with the nationwide, which could be moved up from its previously announced July 15 date, Matt Strauss, chairman of Peacock (and former Media Play News “Digital Driver”) April 14 told a media conference call.

Peacock Premium will be available for free to Comcast pay-TV subscribers; $4.99 monthly with ads to non-subs; and $7.99 with out commercials.

Strauss said NBCUniversal is “evaluating” moving up the launch date with millions of Americans quarantined in their homes due to the coronavirus pandemic.

The SVOD/AVOD platform was expected to play a major role in NBC’s 2020 Tokyo Summer Olympics coverage — plans that were turned upside down when the quadrennial event was pushed by to 2021.

“We feel even more strongly we need to bring Peacock as quickly to market as possible,” Strauss said.

Matt Strauss

The longtime Comcast executive said Peacock originals, including “Brave New World,” an update of “Saved By the Bell,” with original cast members Elizabeth Berkley and Mario Lopez, among others, would be available on the platform later this year or in 2021.

Peacock Free will include 7,500 hours of content, including next-day access to current NBC TV series.

Peacock Premium showcases 15,000 hours of content, in addition to early access (by 3 1/2 hours) to “The Tonight Show With Jimmy Fallon” and “Late Night With Seth Meyers.”

 

Comcast Ups Free Diversity Content as Pandemic Continues

Comcast Cable April 7 announced it is making on-demand programming from more than 12 entertainment networks and subscription video services available for free to its Xfinity X1 and Flex subscribers.

Comcast ended the most-recent fiscal period with more than 20 million video subscribers.

“We’re happy to work with our content partners to make a selection available for free,” Rebecca Heap, SVP of video and entertainment at Comcast Cable, said in a statement.

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On-demand programming currently available for free includes African American Networks and SVOD services AFRO, Aspire TV, Black News Channel, Brown Sugar, Impact Network, kweliTV, REVOLT, The Africa Channel and TV One.

Latino Networks/OTT services include CBeebies, Cinelatino, Cine Sony, Cinema Dinamita MX, Kanal D Drama, Kids Central en español, Pantaya, RCN Novelas, Universo, ViendoMovies and Vme Kids.

International Networks and Subscription Video Services: Filipino On Demand, GMA Pinoy, Hi-YAH!, KOCOWA (all programs subtitled in English) and TV5MONDE.

Comcast said it offers subs access to 160 independent networks, 100 of which are targeted to diverse audiences. Additionally, its customers have access to 20,000 hours of diverse on demand and online programming accessible across Xfinity video platforms, including in specially curated destinations for Black Film and TV, Latino, Asian American Film and TV and International.

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The programming partners join a broad range of other premium networks and subscription video services making on demand programming available free for Xfinity TV and Internet customers.

Beyond free content, Comcast has undertaken a comprehensive COVID-19 response inclusive of opening Xfinity WiFi hotspots located in business and outdoor locations across the country to anyone who needs them for free (including non-Xfinity Internet subscribers), pausing data plans, creating a COVID-19 news destination and a K-12 education destination on X1 and Flex, and making its “Internet Essentials” program free for new families for the first 60 days of enrollment.

Comcast Expecting ‘Material Adverse’ Impact on Business

With its amusement parks business shuttered, Hollywood movies on hiatus and Olympics coverage postponed, Comcast issued a warning to investors that its myriad business segments could have “material adverse” impact in the short-term — including the first quarter ending March 31.

The warning mirrors what The Walt Disney Co. is going through, with some observers speculating Bob Iger’s sudden decision to hand over CEO duties to Bob Chapek revolved largely around his realization of what was in store financially for the Mouse House.

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Comcast Treasurer William Dordelman, in the filing, said the company has closed all theme parks, and delayed Universal Pictures’ distribution of films both domestically and internationally, in addition to the disruption in production and availability of movies and television programming in the United States and globally, postponement of sports events, including the Olympics, and suspension of entertainment content production.

Dordelman said the global situation will “materially exacerbate” Sky’s previously deteriorating economic environment and advertising market in the U.K. and Europe.

“Our Comcast Cable business, while our network performs well to meet the challenge of business and schooling from home, will not be unaffected either as economic stress impacts our residential and business services customer base,” he wrote.

The CFO expects the “ultimate significance” of the impact of COVID-19 on businesses will vary, but will generally depend on the extent of governmental measures affecting day to day life and the length of time that such measures remain in place to respond to the virus.

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Dordelman said it is impossible to predict the extent and duration and the degree to which supply and demand for Comcast products and services, including advertising, will be affected.

“This uncertainty makes it challenging for management to estimate the future performance of our businesses, particularly over the near to medium term. However, the impact of COVID-19 could have a material adverse impact on our results of operations over the near to medium term,” he wrote.

Comcast Offering Free Wi-Fi Access During Coronavirus Pandemic

Comcast, one of the nation’s largest ISPs, March 13 announced it is making available free access to its Xfinity Wi-Fi hot spots nationwide, among other services, over the next 60 days during coronavirus pandemic. The cable giant is also suspending all data cap limits for subscribers during this period.

Hot spot access will be available to anyone, including non-Xfinity Internet subscribers. To find a local Xfinity Wi-Fi hot spot, click here. Once at a hotspot, consumers should select the “xfinitywifi” network name in the list of available hotspots and then launch a browser.

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The company said it would also not cancel a subscriber’s Internet service or assess late fees if the sub contacts Comcast informs the service he/she can’t pay their bill during this period. Comcast said it would work with subs offering flexible payment options, in addition to finding other solutions.

“During this extraordinary time, it is vital that as many Americans as possible stay connected to the Internet — for education, work, and personal health reasons,” Dave Watson, CEO of Comcast Cable, said in a statement. “Our employees also live and work in virtually every community we serve, and we all share the same belief that it’s our Company’s responsibility to step up and help out.”

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