Thursday, February 16, 2012

Can Comcast Winback Cordcutters?

Comcast shared some exciting fourth quarter news and the stock market likes what it hears. It reported its lowest drop of cable customers along with an increase in broadband and telco subscribers. "Speaking to investors Wednesday morning, Comcast CEO Brian Roberts attributed the declining defections to added channels and better customer service. He also said that as housing growth improves, actual subscriber growth may return, too." Is the combination of an aggregate of content networks combined with a broadband pipeline enough to stem the loss of cable subs? Will a better economy cause consumers to return to Comcast or will basic losses continue to persist because the cost is too high to justify and alternative content platforms serve their purpose?

As competition for broadband service remains limited, compelling packages of cable subscription with broadband may just be enough to reverse the cord cutting trend. Once you add up the costs of individual premium services - Roku, Netflix, Amazon Prime, Redbox, with the cost of a streaming platform, the overall cost may just exceed the packaged cost from cable. And perhaps it comes down to access to the latest and greatest available content on cable verse older library content that the other streaming services provide.

Will 2012 prove Comcast right that the trend of cord cutting has reversed and basic subscribers will return to cable or is the Q4 2011 small loss simply a temporary pause in the deepening crack in the dam? We can only wait and see.