Feeds

WTF? Comcast scores MORE sales from fewer vid customers

Plus it keeps hiking prices - how will it hang onto these big spenders?

Security for virtualized datacentres

Analysis Comcast numbers were largely deemed good by its management team on their results call, with a few noticeable holes. Firstly, despite an increase in video revenues, Comcast in fact lost 60,000 video customers in the quarter, a number which appears to be rising. Secondly, there was a major revenue fall in NBC broadcasting.

Another issue is that content costs rose 8.5 per cent, much of this down to new licences to allow the consumption of Xfinity (the cable TV, phone and internet package) on portable devices and the rest down to passing on price rises. Content rate increases will remain in double-digit growth for all of 2013, the company says.

Overall revenues were up five per cent, cash flow up seven per cent, and free cash flow was $3.1bn, certainly a record.

One of the big numbers for Comcast was the rise in video revenues and to us this is a bit of a mystery. Some 72 per cent of its US customers were given price increases. The revenues boost may be attributed to a transition by some users from single to double- and triple-play packages; a take-up of other package upgrades; an increase in DVR use; the purchase of additional adaptors; as well as transactional VoD increases.

Comcast and its ilk are driven to get as many percentage points out of customers as they can for their investors, but surely the higher this video average revenue per unit goes – it went up by 8 per cent this quarter to $155 – the more customers that will consider cutting the cord. To us that’s a mystery that should lead to Netflix-class offerings doing better and better, but equally we’re not sure what Comcast should do about it.

Video revenue growth was up 3.7 per cent ($184m) as a result of all this, the highest rate of growth in any quarter in the last four years. Today 76 per cent of video customers subscribe to at least two products, and 41 per cent subscribe to all three services.

And yet the price increases seem to be the reason for the high video losses, which Comcast execs said usually do not carry over into future quarters. In other words, you raise the prices, a few people drop off and then it’s status quo for the rest of the year.

High-speed internet was the largest contributor to cable revenue growth - up 9 per cent, with an additional 433,000 customers. Voice revenue was up 3 per cent with 211,000 new voice customers. Comcast said that margins were improved by an increase in self-installation to 38 per cent of new installations, compared to 24 per cent last year, and with 29 per cent of customers managing their accounts online.

The new X1 DVR, which offers a new UI, interactivity and apps, is now rolling out nationwide across the US, and is already in 30 per cent of the country, and will be in 50 per cent by the end of Q2. Also the Comcast Home product, which is an Xfinity product, offering home security, lighting control and energy management is rolling out nationwide, and Comcast says it is bringing new customers with it.

It is hard to imagine cutting the cord if you have Comcast triple play, a Verizon attached phone that plays Xfinity video from Comcast, and you use the service to watch out for your home as well. It would be too much of a wrench. Comcast said that 70 per cent Home customers take triple play or quad play.

One thing that is driving the uptake of Xfinity is something Comcast calls a Watch-a-thon, where it encourages a number of extra channels to open up on Xfinity for a week, and this drove hoards of people to mobile viewing and increased home TV viewing too. Its last watch-a-thon got 123 million views across all platforms.

And Streampix, its $5-a-month Netflix standoff product, continued to grow, although it did not give our numbers this time.

Comcast products are now in 500 Verizon stores, and about 1,000 agent stores, with a common billing system, and some new products lined up on a product roadmap, with details still sketchy, but which they confirmed would include High Speed Data and video on mobile phones.

Copyright © 2013, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

Choosing a cloud hosting partner with confidence

More from The Register

next story
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.