Comcast Uses Broadband Monopoly to Temporarily Buck Cord Cutting Comcast's latest quarterly earnings report indicates that Comcast managed to buck the overall cord cutting trend and actually add 89,000 basic video subscribers during the fourth quarter. Like Time Warner Cable, Comcast appears to be benefiting from a return of customers that had previously fled to satellite and telcoTV providers, thanks predominately to the lure of faster speeds and bundle promotions.

Comcast still saw a net loss of 36,000 basic video subscribers for the full year, but the company's short term ability to leech some customers back from telcoTV and satellite with bundle promotions will surely fuel industry denial that cord cutting isn't a trend worth worrying over longer term. Unfortunately for cord cutting deniers, it's not that simple. For one thing, many of these users are just returning from satellite TV and telco TV. Verizon not coincidentally saw its worst TV subscriber quarter since 2006 with just a 20,000 subscriber net gain. AT&T and DirecTV combined meanwhile saw a net loss of 24,000 subscribers during the fourth quarter. In other words a lot of this is just lateral movement back to cable operators by customers lured by updated cable boxes and faster broadband speeds. Despite a quarter marred by continued consumer annoyance at Comcast's poor customer service and business practices (ranging from usage caps to net neutrality violations), Comcast's broadband growth remains strong -- thanks in large part to telco broadband providers unwilling to upgrade their broadband networks to next-generation speeds. For example, as AT&T and Verizon turn the lion's share of their attention toward wireless, the companies are all but forcing millions of unwanted DSL customers off of their lines via a combination of apathy and price hikes. That's leaving companies like Comcast with an incredible broadband monopoly position in countless markets, easily luring new customers with broadband speeds traditional telcos refuse to provide. As a result, Comcast added 460,000 broadband customers on the quarter -- the best subscriber addition tally for broadband in nine years. The company also managed to add 139,000 voice subscribers at a time when many cable voice users are trimming lines to reduce overall monthly costs. The "new" (more likely returning) TV customers are riding along on bundles where television is heavily, but temporarily, discounted. That doesn't mean those customers will stick around. Nor does it mean (contrary to what the industry will soon begin crowing over the next week) that cord cutting was overhyped or non-existent. What it does mean is that Comcast enjoys a monopoly in many broadband markets and is using that power to shove these users toward bundles. In many markets, TV and broadband bundled can be $20 less on promotion than just broadband alone. Many of those customers may find themselves cutting the TV component once the full rates kick in. That's where Comcast clearly hopes its usage caps and its decision to exempt its own stream service from said caps will help keep these users captive. As such, Comcast's fourth quarter TV subscriber number doesn't mean users are necessarily seeing a renewed interest in traditional television or that cord cutting doesn't exist, it just means Comcast's reaping the benefits of its monopoly broadband position, and that bundled broadband users are signing up for TV because it's cheaper than broadband alone. As such, Comcast's fourth quarter TV subscriber number doesn'tor that cord cutting doesn't exist, it just means Comcast's reaping the benefits of its monopoly broadband position, and that bundled broadband users are signing up for TV because it's cheaper than broadband alone.







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Most recommended from 36 comments



karpodiem

Hail to The Victors

Premium Member

join:2008-05-20

Troy, MI ·WOW Internet and..

·Comcast XFINITY

16 recommendations karpodiem Premium Member everyone here knows these numbers are the result of discounted service bundles that wager on the subscriber forgetting that this is a promo offer (internet + tv) and that an elevated rate will kick in after a certain period of time. at which point you call retention and ask for this to be extended or you're cancelling, hang up and try another CSR, or actually go through with cancelling.

SmilingBob2

@scalabledns.com 5 recommendations SmilingBob2 Anon Yup This is why Comcast can do exactly what it wants, when it wants, and doesn't have to worry about poor customer service, caps, sneaky fees, or rising cable tv prices. When push comes to shove, Comcast is a monopoly in many areas (they are in mine) and folks feel like they have little choice but to knuckle under and take it laying down. CyberGuy

join:2006-08-21

Colbert, WA 4 recommendations CyberGuy Member After the SuperBowl... Back to normal.

maartena

Elmo

Premium Member

join:2002-05-10

Orange, CA 2 recommendations maartena Premium Member Population growth The US population grew by around 10 million in the last 5 years, 2 million people per year were either born in this country or came to this country. Of course newborns don't take out a cable sub, and you only need 1 sub per household. But even then, you would expect that with that kind of population growth in general, there would always be a growth of subscribers to a television service.... but instead, there is a decline. Companies have been adding subscribers over the last quarter, but they lost BIG in the quarters before that, still resulting in a net loss....



With population growth you would expect a growth in subscribers as people move out of their parents home, move in from other countries, etc.... the housing industry is booming right now after a slowdown between 2007 and 2012, and construction is happening everywhere. Subscriber loss overall is still happening, despite a good 4th quarter.



And yes, some of those are probably bundled customers too.