Comcast: profits up, but subscriber growth falters

Following what has become a common trend in the cable industry's second quarter, Comcast also saw its revenues shoot up 53 percent, while new subscriber adds fell. The MSO reported second-quarter earnings of $967 million, an increase over last year's results of $632 million in 2008, while revenue increased 4.5 percent to $8.94 billion.  

During the quarter 65,000 new customers signed up for Comcast's broadband Internet service, down from 278,000 in the same period last year. Comcast's CEO Brian Roberts, while acknowledging he was not pleased with the results, believes that the drop in subscriptions is temporary. "We think we understand what happened and have already made some corrections," he said on the company's earnings call.

But there is some light at the end of the tunnel for cable broadband. Even though consumers are cutting back on vacations and dining out to deal with the challenging economy, one thing they won't let go of is their broadband line. A recent Strategy Analytics survey called How Vulnerable is the Bundle? Economic Effects on US Multiplay Spend revealed that when questioned on their willingness to eliminate or to cut down on broadband, only 4 percent of respondents would give up the service. The study added that this implies a 96 percent "keep" rate for broadband.

Still, the cable industry's ability to facilitate new broadband and video subscriber growth will continue to be a challenge. Increasingly, cable is having to fight the growing tide of subscribers that are defecting to telco competitors such as Verizon with their Fiber to the Premises services for both data and video.

For more:
- Wall Street Journal has this article

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