Comcast Shrugs After Shedding 194,000 Cable Subscribers

The long decline in cable television subscriptions continued in 2014, according to yearly numbers released this week by Comcast. For the year, Comcast reported

The long decline in cable television subscriptions continued in 2014, according to yearly numbers released this week by Comcast. For the year, Comcast reported that it ended the year with 22.3 million cable television customers, a loss of 194,000 for the year. Despite this, it added 6,000 video customers in the fourth quarter.

Ironically, the loss of 194,000 subscribers was the cable giant’s best showing since 2007, when it peaked at around 25 million subscribers before beginning on the steady decline it is still experiencing today.

Yet the move from bundled cable to a more decentralized environment of streaming entertainment options like Netflix or Amazon Prime hasn’t hurt Comcast’s bottom line. In fact, the company has returned increasing dividends to investors over the last seven years, helping to calm the sort of fears that losing 194,000 subscribers will bring.

The company has been able to return dividends in part because of the profitability of its NBC Universal subsidiary, which generates higher revenues that Comcast’s cable TV operation.

Yet the main reason why Comcast is shrugging off its subscriber losses is growth within its broadband and Internet phone services. The reason? Diversification. “Customers may be kissing their fat cable bills goodbye, but apparently they still cling to Comcast as an Internet provider to deliver the digital video” according to an article in Daily Finance.

Insider Take:

While Comcast will most likely continue to hemorrhage cable TV subscribers for the foreseeable future, the shift to streaming entertainment options will only end up helping the company in the long run. With more consumers adopting a-la-carte entertainment options, there’s more demand for broadband Internet service, an opening Comcast can certainly fill. It could be argued that the average consumer would rather give up their cable television than broadband Internet access.

Comcast is uniquely positioned to lose cable customers, but gain broadband customers. This is a rather large example of the importance of diversification in subscription offerings and revenue streams, so that your business remains competitive and profitable despite an unfavorable market environment.