Sky lost 99,000 customers in the third quarter of 2019, compared to a gain of 426,000 for the same quarter the previous year. It was the first customer loss for Sky since it was acquired by Comcast, although there were 481,000 net additions over 12 months, taking its total to 23.92 million in Europe. Average revenue per customer was $52.77 per month, down from $56.26 a year previously. Parent company Comcast lost 222,000 residential video customers in the United States, taking its total to 20.42 million, but internet connections grew to 25.99 million.
Sky revenue of $4.55 billion for the third quarter was down 4.2% compared to the same quarter the previous year. Advertising revenue was down 18.2% and consumer revenue was down 3.2%, while revenue from content rose 9.4% to 315 million. Part of the impact was from currency exchange rates. Excluding the impact of currency, revenue increased 0.9%.
Jeremy Darroch, the chief executive of Sky, said the company would be driving its Sky Q product hard in the fourth quarter, which is traditionally a strong period. “Sky Q, which is I think Europe’s best-quality, app-based TV experience by a long way, is about 40% of our business today, and we think we can get it a lot higher.”
It was the tenth consecutive quarterly loss for Comcast of residential video customers in the United States, contributing to a loss of over a million since March 2017. Total residential customer relationships rose by 309,000 in the quarter and 928,000 in a year to 28.80 million. That was driven by an increase in residential internet customers of 359,000 in a quarter, up by 1.22 million in a year to 25.99 million.
While revenue for cable video services was down 0.9% year-on-year, at $5.54 billion in the third quarter, revenue for internet services was up 9.3%, at $4.72 billion. As we have noted previously, what they lose on the swings, they gain in a roundabout way. Total cable communications revenue was up 4%, at $14.58 billion for the quarter.
That might explain why the cable company appears relatively untroubled by the loss of cable video customers.
As David Watson, the chief executive of Comcast cable, told analysts: “If we can’t profitably serve this segment, then we’re going to move them to a broadband-only relationship.” He described video as “important” and profitable in key segments “and for those key segments, we package it with broadband”.
Brian Roberts, the chairman and chief executive of Comcast, described the results as “excellent”.
“We continued our long track record of highly-profitable growth, while also investing in our businesses to further strengthen our leading competitive position,” he said. “Cable had its highest third quarter broadband net additions in 10 years, which drove its best quarterly net additions in total customer relationships on record.”
Stephen Burke, the chief executive of NBCUniversal, spoke to analysts about Peacock, its forthcoming online video service, due to launch in April 2020.
“We happen to be part of a company that has 55 million video customers and is the biggest provider of television advertising in the United States,” he said. “it’s a very, very interesting time as everybody tries to figure out what their strategy is, and we’re very optimistic.”
“We’re going to use the Olympics as sort of an afterburner after our launch, and then we’ll be adding content pretty significantly throughout 2020.” He described the product in development as “beautiful and very different.”