M&E Connections

Video Subscriber Growth Helped Comcast, AT&T Fourth-Quarter Results

Video Subscriber Growth Helped Comcast, AT&T Fourth-Quarter Results

Despite the increasing number of consumers who are opting to cut the cord on their TV services, Comcast and AT&T reported increases in video subscriptions that helped give a lift to each company’s results for the fourth quarter, ended Dec. 31. Comcast added 80,000 net video customers in the quarter, along with 385,000 high-speed Internet customers and 44,000 voice customers, it said. But the video customer growth marked a decline from the 89,000 Comcast added in the fourth quarter a year earlier.

Video revenue grew 4.3% this time, to $5.6 billion, “primarily due to rate adjustments and customers subscribing to additional services,” CFO Michael Cavanagh said on an earnings call Jan. 26. Comcast added 161,000 net new video customers in all of 2016 compared to a loss of 36,000 customers in 2015, he said, adding: “This is the first time in 10 years that we have added video customers for a full year.”

The company has made “good progress” with the continued rollout of its X1 video on demand platform, he went on to say, calling it a “real competitive differentiator.” He told analysts that Comcast deployed X1 to 936,000 net new and existing customers in the quarter and ended 2016 with 48% of its residential video customers having X1, up from 30% a year ago.

The company continued to see benefits from X1 that included better retention rates among customers that had it, he said, adding: “As a result, we will continue our rollout of X1 at a healthy pace.” Comcast expects to boost the percentage of residential video customers with X1 to somewhere in the “low 60s range” by the end of 2017, he said.

Total Comcast revenue grew 9.2% from the quarter a year ago, to $21.03 billion. Profit grew to $2.42 billion (96 cents a share) from $2.06 billion (79 cents a share) a year earlier. Cable Communications revenue grew 7.1% to $12.8 billion, driven mainly by increases in high-speed Internet, video and business services revenue, Comcast said.

Cable networks revenue grew 4% to $2.5 billion, while broadcast TV revenue jumped 14% to $2.8 billion behind a 12.4% increase in ad revenue that was driven by the premiere of Thursday Night Football, higher rates and increased political advertising around the election, it said.

Comcast’s film revenue increased 12.6% to $1.8 billion, with theatrical revenue soaring 96.7% thanks mainly to the strong performance of the animated movie “Sing,” it said. But home entertainment revenue fell 36%.

AT&T, meanwhile, was helped by the launch of its DirecTV Now over-the-top (OTT) streaming service in the company’s fourth quarter. More than 200,000 people signed up for the new service since it launched Nov. 30, according to AT&T.

The introductory price of $35 a month was “attractive” to consumers, CEO Randall Stephenson said on an earnings call Jan. 25. He added that it took AT&T’s U-verse triple-play telecom service a year and a half to get to 200,000 subscribers.

But AT&T reported weaker total results than a year ago, with revenue dipping to $41.8 billion from $42.1 billion and profit tumbling to $2.4 billion (39 cents a share) from $4 billion (65 cents a share).

Excluding DirecTV Now, AT&T ended the quarter with 37.7 million video subscribers, down from 37.9 million a year earlier, it said. The company added that total linear video subscribers decreased by 49,000 in the fourth quarter of 2016, of which 27,000 were in the U.S.

Total broadband connections, meanwhile, fell to 15.6 million from 15.8 million a year earlier, it said. AT&T added 149,000 IP broadband subscribers in the fourth quarter, for a total of 13.9 million at the end of the quarter. But it said total broadband subscribers declined by 13,000 in the quarter.

Revenue in AT&T’s Entertainment Group segment that includes U.S. DirecTV satellite operations as well as broadband and wired voice services to domestic residential customers inched up 1.6% to $13.2 billion, driven by DirecTV video revenue and strong growth in consumer IP broadband, the company said. But revenue from legacy voice and data products continued to decline, it said.

AT&T shares were up 0.31% at $41.52 in early afternoon trading Thursday, while Comcast shares were up 2.28% at $75.11.

  • linkedin
  • fb
  • twitter
  • google plus
  • email

TOP HEADLINES

  • Dolby Cinema Expands in Europe with Les Cinemas Gaumont Pathe Deal (THR)Cinema chain Les Cinemas Gaumont Pathe inked a dea more...

  • Facebook Quietly Adds Piracy Devices to List of Banned Sale Items (Variety)Facebook has joined the fight against illegal vide more...

  • DXC Technology CEO: Sales Team ‘Blown Away’ by Combined CSC-HPE ES Partnership Network (CRN)DXC Technology CEO Mike Lawrie said clients have e more...

  • AMC Entertainment CFO: Premium VOD Window Talks Hit an Impasse (THR)Negotiations between the major studios and domesti more...

  • The AI Fight is Escalating: This is the IT Giants’ Next Move (CIO)Artificial intelligence is where the competition i more...

  • Chile’s Largest Stock Exchange Plans to Implement IBM Blockchain Tech (CoinDesk)A major blockchain trial is moving toward implemen more...

  • Cisco Launches IoT Operations Platform to Save Your IoT Project From an Early Death (TechRepublic)A new IoT platform from Cisco aims to address the more...

  • Smartphones Overtake DVD/Blu-ray for No. 2 Most-Owned Tech: CTA (Twice)Smartphones are now in 80 percent of U.S. homes, a more...

  • 5 Reasons Why CIOs Need to Prepare for Brexit and Modernize IT (Avanade Insights)The degree of impact that Brexit will have on the more...

  • Virtual Reality isn’t a Hit at Home, so Imax Tries Arcades (Bloomberg)Imax, best known for its high-tech movie screens, more...

  • What China’s Live Streaming Crackdown Mean for Marketers (AdAge)Chinese authorities are cracking down on live stre more...

  • Disney CEO Bob Iger: Hacker Threat About Stolen Movie Was a Hoax (Variety)Disney chief Bob Iger confirmed the company receiv more...


OUR MEMBERS