Comcast 'Only' Lost 36,000 Pay TV Subscribers Last Year, Prompting Renewed Cord Cutting Denial

from the best-bad-year-we've-ever-had dept

Wed, Feb 3rd 2016 12:48pm — Karl Bode

Despite 2015 being a banner year statistically for cord cutting, you're going to see a renewed surge in cord cutting denial over the next few weeks. Why? Cable companies like Time Warner Cable and Comcast managed to eek out modest gains in pay TV subscribers in the fourth quarter.

Comcast's earnings indicate a net gain of 89,000 pay TV users in Q4, despite seeing a net loss of 36,000 video subscribers for the year. Despite still seeing a net loss, that's the best video performance the company has seen in eight years (which in and of itself speaks volumes). Time Warner Cable's earnings (pdf) note the cable provider added 54,000 TV subscribers in the fourth quarter, while only seeing a net gain of 32,000 TV subscribers for the year. That's the best Time Warner Cable has done since 2006, and it's a stark improvement when each year's subscriber numbers are put in graphical form:

We'll ignore for a second these companies continue to see impressive subscriber and revenue growth thanks to network improvements, despite claiming Title II would destroy the known universe (that's a different blog post). But the fact that these companies finally saw a modest turnaround after years of steep video subscriber losses was quickly used as evidence by the cable industry, some investment websites and a few analysts that cord cutting is "overblown":

And I'll go further. Cord-cutting fears were overblown by a combination of the journalistic echo chamber and analyst self-interest.
— Swanni (@SwanniOnTV) February 3, 2016

Cable cord-cutting fears overblown. Comcast Gains 89,000 Video Subs In 4Q; other MSOs also gaining. https://t.co/FFgC51M7hy via @SwanniOnTV
— Lee Spieckerman (@spieckerman) February 3, 2016

Except these gains don't debunk cord cutting. Many of these additions are users that had previously fled to satellite TV and phone providers. For years, cable's subscriber losses were predominately to satellite and telco TV providers, whose set top boxes were notably more innovative (Dish's Hopper, for example). In the last few years Comcast and Time Warner Cable have dramatically bumped broadband speeds and updated their own set top boxes, moves that have won some former defectors back. As a result Verizon FiOS saw its worst video subscriber additions since 2006, while AT&T and DirecTV combined saw a 54,000 broadband user net loss and a net loss of 24,000 TV customers last quarter.

That's lateral subscriber movement between legacy pay TV providers, not evidence that cord cutting isn't real. And there's absolutely nothing in those numbers that suggests the very real trend of cord cutting has been "overblown" as a broader industry phenomenon.

There's another major reason cable companies are once again adding video subscribers: their growing monopoly over broadband markets. There are now hundreds of markets in which AT&T and Verizon (now focused almost solely on more profitable wireless) are actively trying to hang up on unwanted DSL customers via a one-two punch of price hikes and apathy. Those annoyed users are being forced to flee to cable if they want current generation broadband speeds. When those users arrive, companies like Comcast and Time Warner Cable are offering them TV and broadband bundles that are cheaper than what they'd pay for broadband alone in order to boost legacy TV subscriber rolls.

As a result, many of these subscribers may not have even wanted TV, and once the promotional rate expires may decide to simply leave again. That's of course where Comcast hopes that the use of usage caps comes in. The company is now exempting its own streaming service from usage caps in the hopes of preventing TV users from cutting the cord. Should they cut the cord anyway and embrace streaming alternatives, they run face-first into usage caps and overage fees. If cable is forced to compete on price for TV, it will be sure to seek its pound of flesh from your broadband bill.

Cord cutting continues unabated in the background of this tussle, like the drip, drip, drip of a leaking faucet nobody wants to fix. And while pay TV growth remains flat or in decline, it's important to remember the overall population and the housing market continue to grow, without a corresponding uptick in cable subscribers. That's a sign that younger people and many new homeowners simply don't think traditional cable is all that important, and the slow drip of cord cutting will, over time, become something more resembling a torrent as, quite bluntly, legacy TV's older audience dies. Cable can do something about this, but it's going to require seriously competing on price above and beyond short-term, subscriber roll boosting promotions.

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Filed Under: cable tv, cord cutting, denial, tv
Companies: comcast

18 Comments

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Hankster (profile), 3 Feb 2016 @ 1:20pm

Internet + TV is cheaper than Internet alone.
Considering that TV + Internet is less expensive than Internet alone it's easy to see why they've "only" lost 36K customers. Wonder how many TV subscribers they would have lost if Internet alone was $20 less than TV + Internet instead of the other way around?
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- Anonymous Coward, 3 Feb 2016 @ 2:24pm
  
  Re: Internet + TV is cheaper than Internet alone.
  This. I don't even have my cable box hooked up. I just have it because it's cheaper than not having it.
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  - Anonymous Coward, 3 Feb 2016 @ 6:44pm
    
    Re: Re: Internet + TV is cheaper than Internet alone.
    You must consider ad revenue. Think newspapers. They make their money mostly through ads and not subscriptions. More subscriptions = more people watching = more you can charge for ads.
    
    So if cable + Internet is cheaper than Internet alone then offering them together means you have more cable subscriptions = more people watching = more you can charge for ads. Even if no one is really watching.
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Tim K (profile), 3 Feb 2016 @ 1:22pm

So my question is what would the numbers actually be if it wasn't frequently cheaper to get the TV with the internet? I technically have the basic TV subscription with my AT&T service because it was cheaper to get that with the internet than just the internet. I've never even hooked up the box, but technically I guess I'm not a cordcutter.
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Anonymous Coward, 3 Feb 2016 @ 1:52pm

Buying Subscribers
Add me anecdotally. I was an Internet-only subscriber since the Adelphia days. Last summer I got around to calling Time Warner to see what they could do to improve my situation. They bumped me 2 performance tiers, dropped my rate $10 per month, but only if I took a package including video.
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Mark Wing, 3 Feb 2016 @ 1:56pm

They tricked a few suckers with the new, edgy "Xfinity" name and calling their service an "operating system." It's not shitty, overpriced cable from the Comcast you hate; it's a full fledged operating system from your buddies at Xfinity!
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ThatDevilTech (profile), 3 Feb 2016 @ 2:04pm

Call me curious too
I'm curious too as to how many are on the cable list only because they "had" to purchase it to get a decent/any deal on the Internet bill. The bundling really skews the numbers and makes the sinking ship look less like swiss cheese. I pay $60/month roughly for decent cable Internet with no cable package attached. Thankfully we don't have to deal with Comcrap, TWC, or any of the other major players...yet. Kodi and Netflix are all we need. The kids use Netflix on the tablets and Roku's while we use Kodi to watch just about anything imaginable.
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Cdaragorn (profile), 3 Feb 2016 @ 3:07pm

This a million times over
companies like Comcast and Time Warner Cable are offering them TV and broadband bundles that are cheaper than what they'd pay for broadband alone in order to boost legacy TV subscriber rolls

I just got another one of these in the mail from Comcast today. This time it even offered speeds more than twice what I'm currently getting from them now. I refuse to sign up for this just to pad their numbers.

Why would I pay to watch commercials? Why would I pay for a ton of channels with nothing I want to watch on them?
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Matt (profile), 3 Feb 2016 @ 3:46pm

Cheaper than just broadband
I cut cable about 10 years ago but due to increased broadband rates it was cheaper to switch to a "triple play" plan. I still don't watch cable and don't even know what my land line phone number is.
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Whatever (profile), 3 Feb 2016 @ 4:12pm

"Except these gains don't debunk cord cutting."

No, of course it doesn't - but there is perhaps some indication that cord cutting isn't all about content or programming, and more about the economic situation of the subscriber base.

The US has gone through a deep and protracted period of economic morass, where people have lost their jobs, their homes, and had to make decisions on a personal level at to what and what was not important to them. The cable bill clearly isn't the most important thing, and new online services (and yes, piracy in it's various forms) has certainly lead to cord cutting.

Not surprising to see, however, that with the economy improving that people are choosing to subscribe again. Perhaps they are getting cable only to get a better internet rate, or are finding it worth taking cable as part of a bundle for their internet service.

Of course, no mention of them adding 1.3 million broadband users... but hey, it doesn't play well with the story line.

Oh, are you going to write a piece about how Google is losing their ass on Fiber? It would make an interesting story...
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- Peter, 4 Feb 2016 @ 1:20am
  
  For me, it is about content
  The "slowing of cord cutting" is a red herring. What it doesn't reveal is the amount of cord shaving as subscribers move to skinny bundles. I might have considered one of these skinny bundles early last year, but at the time Comcast wasn't offering them.
  
  So I found a lower cost broadband provider and severed my relationship with Comcast. Now I stream everything, including international feeds for sports, and do most of my streaming ad free.
  
  I've since lost all tolerance for inane, ad-infested cable programming and would never go back to it at any price. My older sister, having seen my streaming setup and witnessed the ease of accessing affordable quality programs, dumped her Time Warner cable less than a month ago.
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- nasch (profile), 4 Feb 2016 @ 7:01am
  
  Re:
  Oh, are you going to write a piece about how Google is losing their ass on Fiber?
  
  Use the submit a story link.
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alanbleiweiss (profile), 3 Feb 2016 @ 9:11pm

Finally a cord cutter
After debating this forever, in my latest move to a new place, I finally cut the cord this past week. Only a few days in, I'm finding two feelings.

1. OMG look at all this free time I have.
2. OMG look at all this free time I have.

It's bizarre. And I like it.

Eventually someone will need to come out with true a-la-carte options where the combination of the few I actually WANT won't add up to a current cable bill that includes 8 bazillion channels I never watch.

Until then, OMG look at all this free time I have!
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- alanbleiweiss (profile), 3 Feb 2016 @ 9:14pm
  
  Re: Finally a cord cutter
  and to be clear, I make more friggin money than I ever have. (in the "over $200k" range). So for me, it's not about cost savings.
  
  It's about the stupidity of 20th century head-in-the-sand horse-and-buggy models kicking and screaming into the next century.
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- Anonymous Coward, 4 Feb 2016 @ 4:34am
  
  Re: Finally a cord cutter
  "Eventually someone will need to come out with true a-la-carte options where the combination of the few I actually WANT won't add up to a current cable bill that includes 8 bazillion channels I never watch."
  
  OMG look at all this free time you have.
  
  Why the hell would you want to go back to the way things were before? Find one or two providers who carry MOST of the shows you love and keep having that free time to yourself.
  
  On a side note I feel that many TV shows nowadays are designed to numb your mind more than anything.
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  - alanbleiweiss (profile), 4 Feb 2016 @ 9:09am
    
    Re: Re: Finally a cord cutter
    I would NOT want to go back. Didn't say I would. I want CBS (which I can get OTA, and am working on setting up), the NFL network, all NFL games regardless of station, and like three or maybe four other channels.
    
    I don't want ANY extra crap, because then I have to PAY for the extra crap just to watch the handful of channels I want to watch.
    
    Now that I actually live at the beach, I have no desire to spend more than a few hours watching TV anyhow. So again, don't force me to have to buy a bundle, or a bundle-light bullshit option.
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Zonker, 4 Feb 2016 @ 1:04pm

I find it interesting how Comcast has lousy speeds and data caps in areas of the country where there is no competition and no regulation of their business. And yet in the suburban area where I live where there is competition from at least two other ISPs, and new medium density developments are getting up to 1 Gbps service from a small local fiber internet only provider, and our state recently changed its tax laws to favor 1 Gbps services in the hopes of bringing in Google Fiber, Comcast has been boosting my bandwidth annually from 25-50 Mbps in 2013 then 50-105 Mbps in 2014 then 105-150 Mbps in 2015 with no enforced cap (yet).

Just last night I predownloaded XCom 2 from Steam and measured my bandwidth averaging around 180 Mbps (~22 MBps) and in less than 20 minutes I had downloaded a 26 GB file. Imagine if Comcast actually had to compete or was better regulated in the rest of the country. And yet I would still switch to Google Fiber or any other 1 Gbps ISP in a heartbeat if it were available to my home (better service and price).
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Peteo lalo, 4 Feb 2016 @ 8:07pm

Hockey,baseball
Comcast sucks.they keep raising my nill every month...pennies each month.doesnr make sense..the only reason i have cable is so i can watch my hawks and cubs..the other set of crooks are nhl and major leauge..o we have it cheaper...but you cant watch your home team.hows the fcc getting paid..i feel like im watching political partys.it all sucks.
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