Comcast’s Customers Give The Cable Guy the Boot
by Peter Kafka
Posted on February 18, 2009 at 5:09 AM PT
Even in the worst of times, people are supposed to hold their TVs close to their hearts: Turn off the heat? Sure. But don’t you dare take my cable away.
So this can’t be good: Cable giant Comcast (CMCSA) turned in a fourth-quarter report card this morning that beat Wall Street’s revenue and earnings expectations. But it lost more basic subscribers than analysts had expected, and added fewer higher-end digital subs than expected.
Also out the window: Guidance for the year. “There’s a bit less visibility in the business than usual,” Comcast Chief Financial Officer Michael Angelakis told The Wall Street Journal. ”We intend to grow the business in 2009, but we are very focused on expanding our conversation with our investors and shareholders instead of just providing a couple metrics that everyone focuses on.”
The numbers: Excluding a $600 million write-down on Clearwire, Comcast posted earnings of 27 cents a share on revenue of $8.77 billion; Wall Street had been looking for 22 cents a share and $8.63 billion.
The problem: Comcast lost 233,000 basic cable subs; analysts had been expecting something closer to a 150,000-sub loss. More worrisome, the company added only 247,000 high-priced digital subscribers, which is less than half of what Wall Street was expecting.
And it wasn’t as if Comcast’s customers were ditching HBO and MTV and programming their own TVs via Web services like Hulu and Boxee, either: The company only added 184,000 high-speed data subscribers; Wall Street was looking for 250,000.
Comments
Cable service adds up fast and I can understand why people looking to save would wave goodbye to their boxes. I would be interested to see if they are migrating to things like Netflix.
Posted by Ken Okel at February 18th, 2009 at 7:34 amI ditched cable (completely and in two locations) around 98 I think (seems like a month) and I haven’t missed it. I’m running into more and more people who have done the same, finding it a luxury they can afford to do without. In fact I’m far better informed now that I am an Internet potato rather than a couch potato. Now thanks to Youtube, Hulu, and others I still can view those pop-events that bubble to the top of the septic tank of American culture.
Many people used cable to keep the kids out of their hair. The Internet does a better job of that too (with a correspondingly greater risk of mischief).
I know people that watch around 4 hours or less of “TV” all week and yet have the most deluxe cable package. Why? Because they have more money to spend than time to think about how they are spending it.
For the technology involved cable services are far less complex than the telephone system since most cable content is little more than an amalgam of broadcast signals sent down a wire.
I know people who are paying extra for digital content but don’t even know how to access it. Getting paid extra for pixie dust doesn’t seem to bother the cable companies though.
I hope one day we can end these monopoly services. I think it will lead to lower prices and better service (or any service).
Posted by Mac Beach at February 18th, 2009 at 8:07 amI blame Hulu
Posted by Bjorn Tipling at February 18th, 2009 at 10:07 amThere’s another reason this is happening. In some areas Comcast is not setup for HD. So the choice is to either go satellite or Internet. Buying a big screen TV has to be worth it. So when the newer versions that allow for downloading of Netflix and other internet programming become available, that will be a time to financially justify a purchase. Also, monthly fees are high for both video and internet. Depending on the area you live in, drop Comcast and you save enough to cover a house or medical insurance payment.
Posted by peter alexander at February 18th, 2009 at 1:43 pm