News and Analysis
Comcast CEO Brian Roberts says cord-cutting is “happening. We’ve seen it coming.”
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In an interview with Bloomberg TV that aired last night, the cable chief doesn’t expand on the topic, but his blunt acknowledgment that some consumers are dropping their pay TV service because it’s too expensive is still somewhat rare in the industry. Some pay TV executives tend to dismiss cord-cutting as a trend, adding that most consumers still prefer large programming bundles that offer a variety of channels.
Roberts, however, notes in the interview that consumer unrest with cable and satellite services has risen because “television used to be free and now most Americans are paying a lot of money for it and every year it can get more expensive.”
The Roberts comments in the Bloomberg show was first reported by Bob Fernandez of Philly.com.
Comcast is the only one of the top four pay TV operators to manage to avoid what has been dubbed a first quarter bloodbath; the nation’s largest cable operator added 42,000 net video subscribers in the time period. It also has now gained more than 200,000 video subscribers in the last five quarters while many of its rivals have lost customers.
While video defections still remain relatively small — pay TV services still have more than 100 million homes and less than five million video subscribers have left in the last few years — the losses are a growing concern in the industry.
Roberts’ admission that some consumers are cutting the cord while others may be dissatisfied with the rising cost of pay TV likely sheds some light on how Comcast has been able to reverse the industry trend and keep customers on board.
There’s an old saying that it’s easier to keep an existing customer than attract a new one. And Comcast has taken that adage to the bank by offering creative bundles to persuade existing customers from leaving.
For instance, the cable operator peppers Internet-only customers with phone calls, e-mails and other communications to alert them that, in most cases, they could add video service if they just paid a few dollars more per month. That may sound unrealistic, but the price of Comcast’s Internet/video bundle is often just slightly higher than the price of a mid-level Internet plan.
This technique is likely highly appealing to potential cord-cutters.
Comcast has also offered some slimmed-down video packages designed to keep people from leaving.
Judging from Roberts’ comments to Bloomberg, the company has long known that it has to do more to keep subscribers from dropping their video plans, and the extra initiatives have paid off.
— Phillip Swann