Comcast’s Strategy to Survive the Declining Video Market



Comcast lost 140,000 pay-TV customers

Like other cable companies, Comcast (CMCSA) hasn’t escaped the challenge of cord-cutting, as consumers drop traditional pay-TV plans for online video services such as Hulu and Netflix (NFLX). Comcast shed 140,000 pay-TV customers in the second quarter, and its video revenues dropped 1.9% YoY (year-over-year) to $5.6 billion. 

AT&T (T) and Charter (CHTR) lost 286,000 and 73,000 traditional pay-TV customers, respectively, in the second quarter. Dish Network (DISH) posted a loss of 192,000 traditional pay-TV customers in the second quarter. In contrast, Netflix gained almost 1.0 million paying subscribers in the United States in the second quarter.

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Video more of an incidental business

However, Comcast has developed a strategy to cope with the declining pay-TV market. Speaking at a Goldman Sachs investor event in New York earlier this month, Comcast CEO Brian Roberts said the company views its video segment as a support business, rather than a core one.

With video playing a supporting role, Comcast is able to drive the uptake of its Internet access service and improve customer retention. Comcast’s Internet revenues rose 9.3% YoY to $4.3 billion in the second quarter.

Focusing on profitable video customers

Comcast is also tackling the ongoing disruption of the pay-TV market by focusing on high-end customers, which can lead to a more profitable video business. Comcast has partnered with Netflix, Amazon, and Google’s YouTube to distribute its video content through their digital platforms. YouTube reaches more than 1.0 billion viewers.


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