Comcast Today: Earnings Are Up
It’s good to be the king.
Forget the onslaught of opposition to its merger with Time Warner Cable: Today’s earnings report shows that Comcast has a pretty nice business going — for now — even without adding the nation’s second-biggest cable system to its holdings.
For the second consecutive quarter, Comcast added paying television customers, gains that helped the company report strong earnings on Tuesday, including revenues that were up 13.7 percent from the same period a year ago. It also continued to add Internet and telephone subscribers.
Comcast added 24,000 paying television subscribers, a modest increase but notable because most other cable providers are losing thousands of subscribers each quarter. More Americans are becoming so-called cord cutters, abandoning their pricey cable subscriptions in favor of online offerings from services like Netflix, Hulu and Aereo.
Comcast reported net income of $1.87 billion, or 71 cents per share, compared with $1.44 billion, or 54 cents a share, a year earlier. Revenue rose 14 percent to $17.41 billion from $15.31 billion. Analysts on average expecting $17.04 billion.
In the middle of the merger debate, it can’t be argued that Comcast was ill-served by its last merger: The Sochi Olympics on NBC were a major profit center for the company this quarter.
Other Comcastic headlines:
On Tuesday, the Supreme Court will hear arguments from both sides in American Broadcasting Companies v. Aereo, a case that could set an important precedent for how we access broadcast television. Aereo, a startup which allows subscribers to watch live broadcast television online, is accused by the likes of ABC, NBC, CBS and others of copyright infringement. According to the startup, Aereo is just offering viewers another way to use an antenna and watch programs they are already entitled to for free. Considering that television watchers now must purchase pricy antennas or TVs to view theoretically free television, bringing some competition into the static broadcasting network will likely help consumers — especially in light of Time Warner Cable and Comcast’s possible merger, which would concentrate the power of cable companies into fewer hands. (The Wire)
This wasn’t unexpected, but it’s still significant: Netflix has gone on record opposing the merger of Philly-based Comcast with Time Warner Cable. The Washington Post reports, “Netflix is the first major Web company to criticize Comcast’s acquisition plans.” (Philly Mag)
Following the merger, Comcast would own 80 percent of the cooperative through which national advertisers purchase airtime at the local level, 54 percent of the cooperatives though which regional advertisers purchase this airtime, and 69 percent of the market through which local advertisers purchase airtime. Politicians consider these two minute chunks particularly valuable because they can “geo-target” voters down to the county or congressional district. According to an executive in the cable advertising industry who spoke with the Washington Free Beacon on condition of anonymity, Comcast’s cornering of the advertising market has broad implications for political campaigns, which could be priced out of the local market or forced to purchase time for a larger region thus diluting their ability to geo-target. The situation is “potentially rife with abuse” because of the relatively unregulated nature of the local advertising industry and the political leanings of Comcast, the executive said. (Washington Free Beacon)