Comcast added 42,000 cable television subscribers in the first quarter of 2017, as it continued to gain video customers against a background of flat or falling figures for television subscriptions in the United States. DIRECTV remained steady, after recent growth at the expense of U-verse, while Verizon Fios television subscribers fell for the first time.
It was the third successive quarter of subscriber gains reported by Comcast, which added 149,000 subscribers year on year, a gain of 0.7%. That took its total to 22.55 million, including just over a million business customers.
52% of Comcast residential video customers now have the X1 service, compared to 35% a year previously, with a forecast penetration of over 60% by the end of 2017.
Having integrated Netflix with X1, Comcast has also announced that it will make YouTube available through the service, searchable through it voice remote control, allowing customers to browse and view billions of YouTube videos alongside live and on-demand programming.
Comcast has launched its wireless service, XFINITY Mobile, enabling it to include cellular services in its bundles.
Despite the increasing availability of online video services, David Watson, the chief executive of Comcast Cable, told analysts “We feel good about the video momentum even with the increased competitive climate”.
Meanwhile, DIRECTV, which had been steadily gaining satellite customers, mainly from the AT&T U-verse telco service, fell flat.
DIRECTV subscribers in the United States were unchanged at 21.01 million, having gained 900,000 year on year, up by 4.5%. That excludes DIRECTV NOW online subscribers, which are understood to number over 400,000, five months after launch.
The company said DIRECTV NOW gains help to set linear television subscriber decline, but it did not disclose numbers for the service beyond saying they “continued to increase”. It did say that total video revenues were up 1.3%, with satellite gains more than offsetting declines in its telco television service, “as the company continues to focus on profitability”.
Randall Stephenson, the chief executive of AT&T, told analysts churn was up for its satellite pay-television service among standalone subscribers, where it is not bundled with broadband or mobile services. He said they were losing subscribers to cable companies and that “you should expect us to make some adjustments in the market to address that as we move into the rest of the year.”
Internationally, SKY Brazil gained 39,000 while PanAmericana added 52,000, taking their totals to 5.59 million and 8.09 million respectively.
However, AT&T U-verse television subscriber numbers were down again, by 233,000, at 4.02 million, losing 1.21 million or 23% year on year.
Overall, DIRECTV gains have not compensated for losses from U-verse. Taken together the two AT&T services are down by 312,000 year on year, or 458,000 over two years.
“Competitive pressure from cable and the increasing number of over-the-top video alternatives resulted in our video subscribers declining in the quarter,” reported John Stephens of AT&T. “We’re taking steps to address the situation, including simplifying offers and bundling with unlimited wireless.”
“At the same time, DIRECTV NOW is an important part of our strategy and continues to add customers,” he added. “We deliberately pulled back on marketing to give the platform time to mature and improve, and we’re seeing just that. You should expect us to be more aggressive with DIRECTV NOW in the second half of the year, with additional features and content.”
That follows widely reported issues with the service at launch, suggesting that AT&T needs to focus on operational performance.
Verizon Fios lost 13,000 television customers, its first organic quarterly loss since the service launched, leaving it with 4.68 million. While the decline represents less than 0.3% of its subscriber base, it is indicative of the competitive climate.
Matt Ellis, the chief finance officer of Verizon, told analysts the quarterly subscriber losses “were indicative of softer demand for linear video due to the increase in over-the-top offerings, mobile video consumption and competitive promotional offers, particularly in the New York market.”
That made it the first quarter that both telco television services in the United States reported an organic loss of subscribers, although AT&T and Verizon appear far more focussed on their mobile services.