Comcast is losing fewer cable TV customers than it has in the past eight years.
That’s no small feat, considering signs of rampant cord cutting inundating the broadcast industry.
Comcast added 89,000 customers for video service Xfinity in the fourth quarter, the most of any quarter since 2006, according to its earnings release.
Video revenue was up 4.4% to $5.4 billion YOY. Across all its services (cable TV, broadband, Internet and phone), the company netted 281,000 total new subscribers, a 58% increase YOY.
Comcast CEO Brian Roberts told investors on the company’s earnings call that approximately 34% of customers use a combination of its TV Everywhere products while desktop viewing in conjunction with mobile is up 20%.
“We’re segmenting the market better and getting customers to stay longer,” he said.
To boost retention Comcast has launched new video products, some aimed at cord-cutting and “cord-shaving” millennials.
One of these is Stream, a pilot program in Boston and Chicago that allows Xfinity subscribers to access skinny video bundles (i.e., cable packages with fewer channels). Another is Watchable, a new ad-supported service with short-form video clips.
“We’re innovating with video packaging, whether that’s in a streamed or linear fashion,” Roberts said, who added that “the video marketplace is very dynamic now with lots of competition, which [we’re addressing] both on the programming and packaging side while delivering more targeted, advanced advertising.”
From an addressable advertising standpoint, Comcast sees growth opportunity in linear television. The company’s investments in video ad server FreeWheel and addressable ad platform Visible World were spurred by exploration of advanced ads both on the buy and sell side.
“We believe the real opportunity in the linear space is to do the things that digital does so well – measurement and targeting,” added Mike Cavanagh, CFO of Comcast.
NBC CEO Steve Burke also noted during the Q4 earnings call Comcast’s ability to layer in set-top box data alongside programs and ratings data from NBCUniversal, which supplies advertisers with more insights into audience performance.
He also noted NBCUniversal’s scatter market is “the strongest it’s ever been,” a cause for optimism leading up to its 2016 upfront.
In 2015, the network debated whether more digital investments would ultimately depress the upfronts, but given the state of the scatter market, it appears advertisers are placing their dollars later after all, he said.
NBCUniversal’s total revenue for 2015 was $28.5 billion, an 11.9% increase over 2014.
Breaking that down further, the broadcast segment brought in $8.5 billion in 2015, which, excluding $376 million generated by the NFL in the 2015 Super Bowl and $846 million for the 2014 Sochi Olympics, represented 6% growth, Comcast’s Q4 earnings indicated.
NBCU’s broadcast network saw a 7% increase in ad sales driven mostly by higher rates, offset by “higher operating costs and expenses.” Still, NBC’s broadcast segment saw an 8.7% increase in operating cash flow in the fourth quarter, while its cable network business witnessed a 0.3% dip in ad revenue.
Investors asked Comcast execs whether more “transformative M&A” would follow such deals as NBCUniversal’s investment in Vox and BuzzFeed or Comcast’s controlling stake in Universal Studios Japan.
“We read about every possible M&A scenario invented and it’s just that – invented,” Roberts responded. “We’ve consistently said we really like the company we have now, but as you’ve seen with NBCUniversal doubling its cash flow since the time we bought it … [we are] always exploring opportunities to deliver shareholder value as the markets evolve.”
