uploads/2018/05/Comcast-cable-segment-revenues-1.png

How Is Comcast’s Cable Segment Performing?

By

Updated

Cable business rose in the first quarter

Comcast’s (CMCSA) cable business generated revenue of $13.5 billion in the first quarter, a rise of 3.6% year-over-year. The company’s cable revenues have been rising over the past several quarters.

Comcast’s first-quarter revenue was mainly driven by strong growth in its business services units and growth in high-speed Internet and advertising revenues. The growing popularity of Xfinity Home and the rising revenue growth from X1 licensing agreements have also been benefiting its cable business. However, its video and voice revenues fell in the quarter.

Article continues below advertisement

Comcast losing video customers

In the first quarter, Comcast’s video revenue fell 0.8% due to a fall in the number of customers subscribing to its traditional video services as a result of increasing cord-cutting activity. 

Lately, many pay-TV companies have been losing subscribers. While Comcast had to forego 93,000 residential video customers in the first quarter, telecommunications behemoth AT&T (T) lost 188,000 satellite TV customers and added 1,000 U-verse TV customers in the same period. 

OTT market

Traditional cable and pay-TV companies have been losing subscribers, with customers preferring to subscribe to OTT (over-the-top) offerings at competitive prices instead of paying high prices for cable TV connections.

OTT providers deliver video streaming services at cheaper rates than those charged for satellite connections. Through OTT services, customers can directly watch videos over the Internet, which hurts traditional pay-TV subscriber growth. This phenomenon is known as “cord cutting.”

Netflix (NFLX), Amazon (AMZN) with Amazon Prime, and Alphabet (GOOGL) with YouTube are some of the companies that have increased their OTT offerings.

Advertisement

More From Market Realist