Wednesday, January 29, 2014

Comcast and U-Verse Ask, What Cord-Cutting?

Has Comcast and AT&T U-Verse discovered the secret sauce to slowing down or perhaps even reversing cord cutting?  Well in each of their quarterly financials, both have reported increases in video subscriptions.  So while Time Warner Cable has lost customers, these two have added them.  Comcast reported an net add of over 40,000 video subscribers on the quarter, while "AT&T added 194,000 U-verse TV subs in the fourth quarter and 924,000 for all of 2013, extending its TV total to 5.5 million."  That is a huge annual increase.

As both Comcast and TWC are wired franchises that don't overlap, Comcast could not directly gain from Time Warner Cable's misfortune, but AT&T most likely did.  Content drop and poor service are certainly to blame.  For Comcast, Brian Roberts has credited the investment in the infrastructure.  How that encourages new customers to come in, I don't know, but perhaps it most likely kept current customers from deserting. 

AT&T faces issue of customers dropping wired telephone service, losing more than 800,000 telephone customers in the quarter.  While some switched to U-Verse, other simply left.  But AT&T also added over 800,000 wireless customers.  Having a video, broadband, and wireless platform should certainly continue to help AT&T to grow total subscribers. 

Are we seeing the making of a trend and is cord cutting slowing down or is this a blip that will continue to occur as cable companies annually raise their monthly cable subscription fees? Will a Supreme Court ruling later in the year over the Aereo business model affect them or is the infrastructure so strong that it can offer added value that keeps customers from switching off their cable subscription?  For now at least, Comcast and AT&T feel they are beating back the cord cutting phenomenon. 

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