uploads///Comcast cable segment revenues

Will Comcast’s Video Customer Losses Continue?

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Comcast’s video customer losses

Comcast (CMCSA) lost 19,000 residential video customers in Q4 2018 in comparison to 38,000 losses in the prior-year quarter. As a result, video revenues declined 1.6% YoY in the fourth quarter of 2018. The company has been posting a decline in video customer losses for the past seven straight quarters.

The company’s losses in video and voice customers have dented the company’s cable segment revenues. However, strong growth in the business services units, high-speed Internet, and advertising revenues helped the cable company’s revenues grow 5.2% YoY in Q4 2018.

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Pay-TV is losing video customers

Recently, many pay-TV companies have been losing subscribers due to a decline in the subscribers of traditional video services, as customers prefer OTT (over-the-top) offerings at competitive prices instead of paying high prices for a cable TV connection.

Amid the cord-cutting trend, RBC analyst Steven Cahall has downgraded Comcast stock from “outperform” to “sector perform” and has cut his price target from $45 to $42. However, Cahall also believes that Comcast has the potential to outperform in the cable market.

Comcast in the streaming market

Comcast has been trying to become a global company and compete with established streaming players such as Netflix (NFLX), Amazon (AMZN) Prime video, AT&T’s (T) HBO Now, and others to gain revenues. Comcast’s acquisition of European broadcaster Sky, which came after beating out competent players including 21st Century Fox and Walt Disney (DIS), has helped the company to gain a presence in international markets. Comcast’s NBCUniversal is also set to debut its streaming service in Q1 2020.

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