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Comcast Cuts the Cord: Cable TV Customers Drop Below 50% of Company’s Connectivity Clients for First Time

The number of Comcast customers paying for cable TV in the U.S. dropped for the first time to less than half of the company’s residential subscribers in the first quarter.

Comcast saw its total number of U.S. video customers fall to 15.53 million in the first quarter, or 49% of its total 31,826 residential customers.

The current numbers represent a 20% decline from 19.36 million cable subscribers in the first three months of 2022, and reflects a much broader trend toward dumping cable TV among U.S. households. A February report from Samba TV found just 48% of U.S. adults had a monthly cable or satellite subscription, while a slim majority had signed on for streaming services.

Indeed, Comcast, which owns NBCUniversal, also reported that its streaming service Peacock picked up 2 million net new subscribers in the quarter.

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As a result of the decline in cable subscribers, Comcast saw revenue from video fall 8% year-over-year to $7.38 billion in the first quarter, down from $8 billion last year.

Put another way, cable TV revenue in the first quarter was not quite 25% of Comcast’s total revenue of $29.69 billion.

At the same time, both broadband and wireless customers in the U.S. gained steam, another data point that reflects the shift to streaming.

Comcast’s residential broadband customers grew by 4% to 29.8 million, while business customers expanded by nearly 5% to 2.5 billion. Wireless, a smaller part of the business, saw a leap of 83% to 5.7 million customers in the U.S.

U.S. broadband revenue, meanwhile, jumped 5% to $6.34 billion, while wireless revenue leaped 27% to $858 million.

Comcast pointed to residential connectivity as one of its growth drivers for the quarter. Average revenue per user, a key metric of profitability, rose 4.5% during the quarter, the company said.

CEO Brian Roberts, on the conference call to discuss the quarter’s result, said among the points he was “really proud of” during the quarter was a “significant margin expansion” in the connectivity business and the ARPU growth in U.S. residential broadband, which he said “demonstrates successful discipline and excellent management in a challenging competitive environment.”

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Residential connectivity, both broadband and wireless services, is also a focus for the future, said president Michael Cavanagh said on the call.

“While the marketplace is competitive, such that adding [subscriptions] in the near term is likely to be a challenge, I fully expect we will eventually return to subscriber growth,” he said.

In the meantime, the company is working on growing broadband ARPU among existing companies, increasing penetration in wireless and “making proactive investments to expand our footprint at the fastest pace in our history,” said CFO. You saw us do this all of last year, and in the first quarter and expect this trend to continue

Cavanaugh added that business services is another “major growth opportunity,” as it approaches $10 billion in annual revenue.

In midday trading, Comcast shares jumped $2.97, or 8.1%, to $39.49. The stock has traded hands between $28.39 and $44.66 in the past 52 weeks.

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