Comcast’s pay TV business remains profitable, and the industry giant won’t chase unprofitable subscribers given the competitive marketplace, the head of the company’s cable systems unit said Tuesday.
“Video is very important to us,” Dave Watson, president and CEO of Comcast Cable, said at the Deutsche Bank 2019 Media, Internet & Telecom Conference in Palm Beach, in an appearance that was webcast. “First and foremost, it is profitable.”
But he emphasized that Comcast, like other cable powerhouses, sees video as “a great complement to broadband” services, which have become the core business for them in recent years. “Broadband is the foundation, with which we start the relationship…. Video can be a great supporting part of that package.”
Watson highlighted that video is an “intensely competitive” business, partly because of the “large amount of OTT folks” that have jumped into the field over the last few years.” That is why Comcast is “simply not going to chase unprofitable video relationships,” the executive said.
The U.S. pay TV industry recorded its largest-ever video subscriber decline in 2018 amid cord-cutting and satellite TV providers’ decision to also stop chasing, via expensive promotions and the like, customers that don’t pay much and therefore don’t allow the companies to make money.
Watson on Tuesday also lauded Comcast’s X1 platform, which allows customers to access content across live TV, on demand and DVR libraries. With Netflix, YouTube and Amazon already integrated into X1, the Comcast executive said he expects more video, and likely also music, apps to be added over time. And OTT and direct-to-consumer services will want to be part of X1 given it works well and seamlessly for consumers, he argued.
“We’ll think about those applications over time,” Watson concluded. “But at the same time, because of consumer choice, because of all this competition, we’re just not going to chase video.”
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