Will Comcast's Lost Subscribers Come Back? Don't Bet On It
Oh, goodie! Those 275,000 subscribers Comcast lost in the this quarter (for a grand total of almost 625,000 this year) aren't cord-cutters! That's, at least, the sentiment the company telegraphed during its third-quarter conference call.
What's a cord-cutter? A person who drops cable because they know they can go watch TV on the Internet. Comcast also said the dropped subscribers, for the most part, weren't leaving for another service, like Verizon FiOs, or DirecTV. So, really, it's all good, even if the subscriber drop exceeded estimates!
Oh, who were these people? Craig Moffet, an analyst with Sanford C. Bernstein & Company, told The New York Times: ""The customers they are losing tend to be in the bottom half of the economy -- a lot of them appear to be struggling to make ends meet."
Of course, this, relatively speaking, is good news. And they weren't the customers who were paying for the high-end Comcast services anyway -- the average cost of a monthly Comcast cable bill is now $129.75, a 21 percent increase in two years when the economy hasn't exactly been burbling along -- and certain demos can't afford that, or a cheaper package.
But, still there's reason for concern. The stories I've read about the loss in subscribers suggest that when the economy comes back -- whenever that is -- so will the subscribers. But that's not a bet I would double-down on. If most of us had to pick between two so-called "necessities" -- Internet access or cable -- we'd pick the former. So, while many of these lost subscribers told Comcast in exit interviews that they weren't cord-cutters, that doesn't mean there isn't the potential for them to become cord-cutters, if after the fact. They may not have a cable box but they may have the Internet. Even if they don't, these same people may discover the cheaper alternatives to cable because they don't have it -- something they never would have if they hadn't decided to cancel their Comcast subscription in the first place.
In the NYT story, Moffett criticized the cable industry for not offering cheaper packages, in the $60 range, by letting people cherry-pick channels a la carte. He's got a point -- though despite the subscriber drop, revenue was still up eight percent. However, it still might be better to find ways to keep subscribers in the fold as the alternatives multiply, even at a lower price.
Photo courtesty of WorldTVPC.com
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