For the second straight quarter, Comcast has achieved growth in video subscribers, with 24,000 customers taking out video packages with the US cable behemoth during Q1. Before that, it lost video customers for at least 20 consecutive quarters—cord-cutting, if you will—as the above chart shows. We have previously attributed Comcast’s return to growth in video customers to its set-top box, the X1, which has a sleek, easy to use interface and has even won praise from Reed Hastings, CEO of video-streaming firm Netflix. That appears to be the case here.
Separately, an extraordinary war of words between Comcast and Netflix broke out overnight, after Hastings criticized Comcast’s proposed deal to buy Time Warner Cable. “I don’t know that we want anybody to control half the US internet,” Hastings said on his company’s earnings call. Comcast’s response to Hastings was swift and brutal, accusing it of flexing its own market power.
The real issue at stake between the two is, of course, net neutrality: Hastings is worried that a dominant cable provider that’s also a broadband internet provider might start putting limits on a high-traffic video site like Netflix. The strong performance of Comcast’s broadband internet business in the first quarter will do nothing to assuage concerns about its dominance. The company added 383,000 new broadband customers, and posted revenues of $2.75 billion, an increase of 9%—its fastest rate of growth for two years.
On the other hand, some of those new broadband subscribers are inevitably going to become new customers for Netflix. Which makes it all the more remarkable that Comcast is adding video subscribers too. It seems to be winning on all counts.