Comcast isn’t suffering the effects of cord cutting quite as fast as many expected, given the increasingly wide array of options for people looking to use Internet video as an alternative to cable television.
Comcast did lose 69,000 video customers over the course of the quarter, but that always happens this time of year. The company has actually lost customers in the second quarter in six of the past eight years. Last year it lost more than twice as many customers as it did this year during the same period, an indication that 2015 hasn't been so bad, after all.
It wasn’t supposed to be easy for cable companies this year. HBO Now and Sling TV led a batch of new Internet video offerings, and Netflix added almost a million subscribers in the U.S. last quarter. This quarter will be a “put up or shut up time for the cord-cutting thesis,” industry analyst Craig Moffett wrote in a note to analysts earlier this month. On average, analysts expected Comcast to lose 112,000 customers, according to data compiled by Bloomberg.
Comcast attributed its strength to a sincere attempt at customer service, bolstered by improved technology that keeps people from having to call its representatives as often, and on its X1 cable boxes. The devices have gotten consistently positive reviews, and one-third of Comcast’s triple-play subscribers now use them. The company’s theory seems to be that people who are tempted to cancel their cable service can be persuaded to stay by experiential—rather than financial—incentives.
On the financial side, there’s continued increase in a metric that investors refer to as “average revenue per user” and that customers refer to as “the cable bill.” The cable company’s average subscriber paid $143.48 per month, up 4.5 percent from a year ago.
Even if Comcast does lose customers to cord cutting, higher bills for existing customers more than compensate for it. In the forecast that Moffett put out earlier this month, he predicted that Comcast would lose 113,000 video subscribers over the next five years while also increasing the amount that each one pays by about $16. Even without Comcast’s other businesses—high-speed Internet, NBC’s thriving broadcast network business, theme parks—the old-fashioned cable company seems to be surviving just fine in the brave new world.