uploads/2018/09/2-28.jpg

Comcast’s Strategy to Survive the Declining Video Market

By

Updated

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.

Article continues below advertisement

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.

Advertisement

More From Market Realist