Comcast lost 477,000 cable TV subscribers in Q2 2020 amid a company-wide decline in pandemic-induced revenue. Consumer net loss consists of 427,000 residential TV customers and 51,000 commercial TV customers, Comcast’s earnings report said today. Customer losses are more than double the net loss of 224,000 customers in the second quarter of last year.
In contrast, Comcast lost 733,000 video customers in 2019 as a whole, averaging 183,000 quarterly.
While Comcast’s TV customer loss has accelerated this year, they are still only about half the size of the customer loss reported by the AT&T owner of DirecTV. Comcast is up to 20.4 million TV customers, which is higher than any other cable or satellite TV provider.
The numbers of cable and satellite TV subscribers have been declining across the industry for many years as people switch to streaming services that generally have lower prices, lower hidden fees, and a less onerous contract or no contract. Live sports is the primary attraction for many of the remaining cable customers, but there was less reason to pay cable companies for live sports when most sports leagues were suspended. The resumption of live sports, albeit in precarious circumstances, should help cable companies a little.
Revenue and falling revenue
All of the Company’s revenue, including NBCUniversal and other businesses, Comcast’s revenue was $ 23.7 billion in the quarter, down 11.7 percent year-over-year. Net income was $ 3.2 billion, down 12.2 percent. NBCUniversal theme park revenue suffered a dramatic decline for obvious reasons, falling from $ 1.47 billion in Q2 2019 to $ 87 million in Q2 2020.
Comcast’s cable TV revenue in Q2 was $ 5.4 billion, down 3.2 percent year-over-year. The drop “reflects[s] a decline in the number of residential video customers, partly offset by an increase in average rates, ”Comcast said.
Broadband revenue was $ 5 billion, up 7.2 percent year-over-year, with Comcast adding another 323,000 Internet subscribers in the quarter. Comcast, the nation’s largest internet provider, has 29.4 million broadband customers, of which 27.2 million are residential. Broadband Revenue “Reflects[s] an increase in the number of high-speed residential internet customers and an increase in average rates, ”said Comcast.
Comcast said its reported net gain of 323,000 broadband customers excludes more than 600,000 “high-risk” and low-income customers receiving a free Internet Essentials service.
The total revenue of the cable division (including the Internet, video, home phone, mobile service and advertising) was $ 14.4 billion, down less than 0.2 percent year-on-year, and would have been higher if not for a 29.6 percent reduction in advertising revenue and Comcast gives customers a little break on bills due to COVID-19. This included Comcast following the FCC’s “Keep Americans Connected” commitment by waiving late payments and by not disconnecting customers who could not pay due to the pandemic.
Paid “adjustments” for sports
Comcast said its cable revenue was reduced by “adjustments” to Regional Sports Network (RSN) fees charged to subscribers due to canceled sporting events. The average price that each TV customer pays to Comcast “would have been higher had it not been for the waived payments due to COVID-19 and the impacts of the tariff adjustments on the customer’s RSN,” the company said. Comcast’s average monthly revenue per cable customer was $ 150.17, down from $ 156.71 three months earlier, partly reflecting an increase in the number of “single product customers” such as to buy broadband service but not TV or telephone service.
Comcast also had lower costs for the purchase of programming due to sports cancellations. “Total operating costs have benefited from adjustments to the provisions in our programming distribution agreements with RSNs related to sporting events canceled as a result of COVID-19,” Comcast said. “Programming costs fell 5.0 percent, primarily due to adjustment provisions.”
Comcast owns eight RSNs itself, so the fee adjustments also reduced Comcast’s cable network revenue. “Distribution revenue decreased 14.8 percent, reflecting the credits accumulated in some of our RSNs resulting from the reduced number of games planned by professional sports leagues due to COVID-19 and a decrease in subscribers, partially offset by contract rate hikes, “Comcast said. Cable network revenue fell 14.7 percent to $ 2.5 billion in the second quarter.
Comcast recently launched NBC’s Peacock streaming service and said it has signed up 10 million users so far today.