Consumer Traits in the Cable and Internet Segment in Q3

Cable television viewership and customer counts keep dropping as the segment sees ever-growing competition from streaming upstarts. Cord cutters see them as alternatives to standard cable TV. However, Comcast^®, which provides cheap cable and internet packages to customers, had a fine third quarter (Q3). Further, it added to its footprint in the country, picking up 288,000 net and new subscriber relationships. In the Q3 earnings call the CEO of Comcast^®, Brian Roberts said, “We surpassed 30 million customer relationships.”

In an age when people are also looking for alternatives to traditional cable TV, the Philadelphia-based telecommunications company is unperturbed by the signs cable TV segment is dwindling.

“The cord is still intact,” said the Executive VP of XFINITY^® Services, Matt Strauss. “When people describe cord cutting I think in many ways it’s a misnomer because we don’t see people cutting the cord for high-speed data.”

In Q3, the Philly-based Telco added new broadband customers. Its broadband customer base is increasing at around 5.5 percent, which is more than the rest of the segment, as per Cowen analysts. They predict that the company could add another one million customers in 2019.

Part of its strength in broadband additions can be attributed to an increasing requirement for a quick and persistent residential internet connection and a strong economy.

“The utility of broadband access is high and rising,” wrote Morgan Stanley analysts. It conducted an industry survey and found that the risk of cutting the internet broadband cord was actually low among respondents but particularly among cable subs. That possibly has to do with distinctions between how telecommunications companies and cable providers deliver the internet. The latter have a natural leg up on the former when it comes to providing quicker internet due to the differences in infrastructure.

In the telecom segment, the cheapest broadband option is usually Digital Subscriber Line. The DSL internet service is delivered over existing copper wire. It is slow, which limits the capability for streaming. On the other hand, the cheapest cable-based internet option is delivered over existing coaxial cable. You can also subscribe to cheap cable and internet packages from any of the coaxial cable operators.

At a comparatively higher cost, coax cable internet provides quicker speeds as well as more reliability. Fiber-based internet is the quickest and most expensive option delivered by telecommunications and cable operators.

Comcast^® has a bigger broadband business than subscription TV business. The Telco also touts the time its subs stream Netflix programs on their XFINITY^® X1 device. Strauss said, “In a relatively short amount of time we’ve become, in our footprint, the number one platform for Netflix.” That is a positive thing for Comcast^®.