On February 17, 2016, FierceCable reported that Comcast (CMCSA) is offering credit to customers who were affected by the company’s cable service outage on Presidents’ Day, February 15, 2016. However, Comcast didn’t specify the amount of the credit. Comcast’s service outage lasted 90 minutes and resulted in Comcast customers being unable to watch cable channels.
Comcast Cable had a strong performance in fiscal 4Q15 and fiscal 2015. Its Cable Communications business had revenues of $12 billion in 4Q15, a growth of 5.9% over 4Q14. Revenue growth was primarily driven by an increase in two-product and three-product customers for the company’s Triple Play package, which includes voice, video, and high-speed Internet services.
In fiscal 2015, Comcast’s Cable Communications business had revenues of $46.9 billion, an increase of 6.2% year-over-year.
In contrast, Charter Communications (CHTR) had triple-play (video, voice, and high-speed Internet) revenues of $2.1 billion in 4Q15, a growth of 7.2% over 4Q14. Time Warner Cable (TWC) residential services business revenues were $4.8 billion in 4Q15, an increase of 4.6% over 4Q14.
Revenue growth drivers
Previously, Comcast Cable had a negative NPS (net promoter score). Comcast has taken many initiatives to improve its NPS, including trying to ensure that its technicians arrive on time at the customer’s home and introducing an app for tracking the company’s technicians and improving its billing system.
Another factor in Comcast Cable’s strong performance in fiscal 4Q15 and 2015 was offering a variety of products in its triple-play service based on market segmentation.
By offering different products in its triple-play service, Comcast is catering to Millennials who want a variety of content and tend to be heavy video viewers. Offering different products means Comcast can upgrade an existing customer instead of losing the customer to its competitors. It also suggests that market segmentation could result in the reduction of involuntary churn for Comcast, which could drive up the company’s ARPU (average revenue per user) for its cable communications business.
In this series, we’ll look at key growth drivers and factors affecting Comcast’s high-speed Internet, voice, and video businesses. We’ll also look at Comcast’s fiscal outlook for 2016.
Comcast makes up 3.1% of the PowerShares QQQ ETF (QQQ). For an investor interested in getting exposure to the television and radio sector, QQQ has 4.7% exposure to the sector. QQQ also holds 5.2% of Amazon (AMZN).