Comcast added 262,000 broadband subscribers in Q1, better than some analysts' estimates and fueled by what the company said was record customer retention levels in the period, as its wireless business had its best quarterly subscriber gain ever. 

Broadband growth was still nearly half of the 461,000 customers it added in Q1 2021, but Comcast bested some analysts who expected subscriber additions in the 180,000 to 225,000 range. The big difference appeared to be customer retention. Comcast does not release churn numbers, but said its broadband business “benefited from the highest level of customer retention on record for any quarter.” 

Analysts noted that a good chunk of the broadband gain was the result of the conversion of customers who were on free plans that ended in 2021 to paying subscribers. Excluding this one-time gain — which some analysts estimated accounted for about one-third of additions in the quarter — and Comcast actually added about 170,000 to 175,000 broadband customers in the period.  

Also: Brian Roberts Says Peacock Had ‘Exceptional’ Quarter

On the wireless side, Comcast continued to impress. Its 318,000 customer additions in the period increased its total wireless base to 4.3 million. 

The subscriber increases also helped drive cable unit revenue up 4.7% to $16.5 billion and cash flow rose 6.5% to $7.3 billion. Consolidated revenue was up 14% to $31 billion and overall cash flow rose 8.8% to $9.2 billion.

In a press release, Comcast chairman and CEO Brian Roberts was pleased with the results, and noted the company continues to make “important organic investments,” pointing to its streaming platform partnership with Charter Communications that was unveiled yesterday (April 27).   

“This partnership demonstrates the benefits of our focus on innovation and enables us to bring entertainment aggregation and streaming products that run off our global technology platform to millions more customers,” Roberts said. “In cable, we are increasing the capacity of our broadband network and providing our customers with cutting-edge equipment that delivers the best in-home experience. Our media business is performing well, and the scale of our reach is underscored by our successful broadcast of the Super Bowl and the Olympics in the same week. These events were viewed by more than 200 million people in the U.S. across NBCUniversal’s platforms, including Peacock, which had an exceptional quarter. Our recovery from the pandemic at theme parks has been fantastic and shows no signs of slowing down.” ▪️

Residential video and broadband subscriber metrics at Altice USA were basically in line with analysts expectations in Q1, while the company managed to squeeze out 1.2% revenue and 4.2% cash flow growth in the period. 

Altice USA added about 12,000 broadband customers in Q1, slightly less than the 13,000 some analysts predicted. The company shed about 54,000 video customers in the quarter, compared to the 56,000 losses predicted by some analysts. Overall revenue was up 1.2% to $2.5 billion and cash flow grew a healthy 4.2% to $1.1 billion. 

The subscriber growth was behind last year, when the pandemic was at its height and stay-at-home orders drove record growth in broadband. For Altice USA, one of the most heavily penetrated cable operators in the country, it added about 142,000 broadband customers in 2020 and lost about 237,000 video subscribers for the full year. 

Also Read: Altice USA Chief Says M&A 'Definitely’ on the Agenda

Analysts have been expecting growth to slow down this year after last year’s gains. In a research note, Wells Fargo media analyst Steven Cahall wrote that he expected broadband growth to be the big story for Altice USA during the quarter and the year. 

“The company will have to prove that it can continue to grow organically for investors to fully back the capital return story,” Cahall wrote. “If growth is tracking well then [Altice USA] is a [free cash flow] narrative at a 12% [free cash flow] yield. If growth stalls then that becomes the narrative.” 

In a press release, Altice USA CEO Dexter Goei said he was pleased with the results, which he added, position it well for the rest of the year.  

“We continue to see increased demand for broadband and higher speeds as we accelerate our best-in-class network performance through our investments in fiber and enhance our product offerings,” Goei said in the press release. “Our team's ongoing commitment to serving our customers continues to be reflected by our strong broadband customer results and financials in the quarter. Furthermore, we delivered best-ever first quarter free cash flow performance, supporting an incremental $523 million in share repurchases. Earlier this month we closed our Morris Broadband acquisition, and we continue to look for opportunities to expand our footprint to complement our numerous organic growth opportunities, including accelerated new builds and fiber upgrades."

Dish Network pay TV subscriber losses nearly doubled in the first quarter to 413,000, as declines at its streaming service Sling TV outpaced those at its satellite TV unit for the first time.

Dish ended the quarter with 11.3 million pay TV customers, 9.01 million satellite TV customers and 2.3 million Sling TV customers. In its 10-Q quarterly report filed with the Securities and Exchange Commission, Dish said it lost about 281,000 Sling TV subscribers, while customers of its satellite TV service fell by 132,000.

Dish launched Sling TV in 2015, and the service gained customers for 19 straight quarters, peaking at about 2.7 million customers in Q3 2019. That streak was snapped in Q4 2019, when it lost about 94,000 customers, and continued in Q1.

The declines were due in part to the COVID-19 pandemic, which has decimated pay TV subscriber rolls across the country. In a press release, Dish said the impact of the pandemic was especially hard in its commercial segments, which include the airline and hospitality industries. Dish said it paused about 250,000 commercial customer accounts or provided temporary rate relief in an effort not to charge them for services that were no longer being viewed.

Also possibly affecting pay TV results was the absence of sports programming associated with the pandemic. Dish also stopped carrying several regional sports networks in July, and in November 2018 dropped carriage of premium channel HBO. In addition, Sling TV initiated a $5 per month price increase in January, which may have spurred some customers to switch.

But analysts also noted that the decline came at the same time Sony shuttered its PlayStation Vue streaming service, essentially setting about 500,000 homes in search of a new pay TV provider. That Dish didn’t appear to snap up at least some of those former PlayStation Vue customers concerned some analysts.

“[E]ven if many existing Sling customers were leaving, why weren’t more new ones subscribing, given that 1) Sling remains the cheapest of the vMVPDS, and 2) there were so many displaced cord-cutters who were, presumably, looking to go somewhere,” MoffettNathanson principal and senior analyst Craig Moffett wrote in a note to clients. 

Broadband additions beat analysts expectations at Comcast in Q1, outpacing higher than expected video customer losses in the first quarter, while its content businesses were hit hard by the ongoing COVID-19 pandemic.

Comcast added 477,000 residential and business broadband customers in the quarter, well ahead of analysts expectations of 363,000 additions, and not including the free service the company began offering families with school children at the onset of the pandemic. The company lost 409,000 residential and business video customers in Q1, nearly four times the 121,000 it lost in the prior year and well ahead of most analyst expectations.

The broadband growth helped stabilize the cable distribution business’ finances -- revenue was up 4.5% to $14.9 billion and OIBDA rose 6.1% to $6.1 billion. But the company said the second quarter could be a much different story.

In a press release, Comcast said it expects the effects of the pandemic “to increase in significance in the second quarter 2020 and to have a material adverse impact on our consolidated results of operations over the near-to-medium term.”

In a research note, Evercore ISI media analyst Vijay Jayant said the results showed the strength of the distribution business.

“Overall, while the full impact of COVID won’t be felt until 2Q, the results show the underlying strength and resiliency of the company’s cable business,” Jayant wrote.

The virus had a bigger impact on Comcast’s NBCUniversal unit, with revenue down 7% to $7.7 billion and EBITDA down 25.3% to $1.7 billion, fueled mainly by declines at its filmed entertainment and theme parks units. Cable networks revenue was down just 0.3% to $2.9 billion, while broadcast revenue increased 8.8% to $2.7 billion.

Consolidated revenue decreased 1% to $26.6 billion and EBITDA fell 4.9% to $8.1 billion.

“Now more than ever the world needs to stay connected, and we’re extremely pleased that our investments in our network continue to pay off as we are handling significant increases in traffic and meeting our customers’ needs,” Comcast chairman and CEO Brian Roberts said in a press release. “While parts of our business have been more impacted by COVID-19 than others, we have continued to innovate. We are distributing our content in new ways,as evidenced by the recent launch of Peacock on X1 and Flex.

“...We have a strong balance sheet, terrific portfolio of assets,and a world-class management team,” he continued. "This is a moment in time; and when it passes, I am very confident that the decisions we are making now will enable us to emerge from this crisis as a healthy, strong company that is well positioned to continue to grow and succeed.” 

AT&T reported the loss of another 1.035 million pay TV subscribers in the first quarter across its myriad video platforms, quashing hopes that the new AT&T TV internet-based platform would reignite customer growth.

The Dallas-based telecom said it lost 897,000 users across its premium pay TV services, grouping the just-launched AT&T TV with DirecTV satellite and U-verse IPTV platforms. AT&T is seeking to transition its premium base to the new AT&T TV platform, which launched at the beginning of March. It’s not selling new U-verse subscriptions and its selling existing U-verse TV and DirecTV subscribers on the notion of switching over to AT&T TV, which is provisioned around cost-efficient customer-install of a proprietary Android TV set-top and requires no satellite support either. 

So how many AT&T TV customers are there a month and a half in? Unclear.

Also read: AT&T TV: Everything You Need to Know About the Streaming Version of AT&T’s Premium Pay TV Service

AT&T now has just 18.58 million remaining pay TV users. It had the biggest pay TV user base in the U.S. when it closed its $50 billion purchase of DirecTV in 2015, serving more than 26 million customers. AT&T has lost around 38% of its pay TV negotiating scale in five years. 

In March, it was reported that AT&T COO John Stankey, who has overseen the company’s video strategy as head of its entertainment group, saw his pay increase by 38% to $22.5 million in 2019. 

Also read: AT&T TV, DirecTV Add Free Year of HBO

But there was more bad news for AT&T’s video business during Wednesday’s Q1 report. 

Notably, AT&T also lost another 138,000 AT&T TV Now virtual MVPD subscribers. Once approaching 2 million users on a promotion-fueled growth ride, AT&T TV Now is down to just 788,000 users.

You can read more about AT&T’s first-quarter earnings report here. 

Netflix reported a better-than-expected increase of 15.77 million subscribers globally in the first quarter, with pandemic-bound viewers stuck at home with few better options but to stream video entertainment. 

The performance more than doubled the SVOD service's pre-pandemic forecast of 7 million customer additions.

Netflix finished the first quarter with 182.9 million paid subscribers globally, up 22.8% from a year earlier. The company said it expects its subscriber count to more than 190 million in the second quarter.

Also read: Netflix’s ‘Tiger King’ Emerges as Ferocious Binge Hit Amid Pandemic Viewing Spike

In the U.S. and Canada, the number of paid memberships rose by 2.3 million to 69.97 million.

“[O]ur membership growth has temporarily accelerated due to home confinement,” Netflix said in its quarterly shareholder letter. The streaming company also said that “some cash spending on content will be delayed, improving our free cash flow, and some title releases will be delayed, typically by a quarter.”

The company’s first quarter earnings were up, but revenues were constrained by the strength of the dollars. The company’s cash-flow position improved because it couldn’t spend money on programming because the virus has shut down production.

“At Netflix, we’re acutely aware that we are fortunate to have a service that is even more meaningful to people confined at home, and which we can operate remotely with minimal disruption in the short to medium term. Like other home entertainment services, we’re seeing temporarily higher viewing and increased membership growth,” the company said.

“Hopefully, progress against the virus will allow governments to lift the home confinement soon. As that happens, we expect viewing and growth to decline. Our internal forecast and guidance is for 7.5 million global paid net additions in Q2. Given the uncertainty on home confinement timing, this is mostly guesswork, the company said. 

First quarter net income jumped to $709 million, or $1.57 a share, from $344 million, or 76 cents a share a year ago.

Revenue rose 27.6% to $5.768 billion.

The company’s profit margin rose to 16.6% from $10.2 %, but was below the company’s 18% forecast. 

Netflix said free cash flow was $162 million, turning positive after negative cash flow of $1.67 billion in the fourth quarter and $460 million in first quarter 2019. The company said cash flow was positive because cash spending on programming slowed because of the shutdown of production due to the Coronavirus. The shutdown will result in the release of some titles being delayed. The company expects the delays to be about one quarter.

The company said it now expects negative cash flow of less than $1 billion this year, compared to the $2.5 billion to $3.3 billion it had been expecting. “However, there has been no material change to our overall time table to reach consistent annual positive FCF and we believe that 2019 will still represent the peak in our annual FCF deficit,” the company said.

Netflix said some of the subscriber growth it saw this quarter may result in slower growth in upcoming quarters as stay-at-home rules are relaxed globally.

“Intuitively, the person who didn’t join Netflix during the entire confinement is not likely to join soon after the confinement,” the company said.

Netflix said it was taking steps to bolster its customer support operations and lend a hand to the production community during the crisis.

“On the customer support side, we’ve now fixed most of our work-from-home challenges. In addition, we’ve taken on another 2,000 agents (all working remotely), so our customer service levels are almost fully restored despite the increased demand,” the company said.

"When it comes to production, almost all filming has now been stopped globally, with the exception of a few countries like Korea and Iceland. This has been devastating for millions of workers in the TV and film industry - electricians, hair and make-up artists, carpenters and drivers who are often paid hourly wages and work project-to-project,” the company said. 

In March the company created a $100 million fund to help workers on Netflix productions. It said crews are being paid for about seven weeks until government safety net payments kick in.

“In addition, we’re donating $30 million to third parties and non-profits, providing emergency relief to out-of-work crew and cast across the broader TV and film industry in countries where we have a large production base. This includes donations of $1 million each to the SAG-AFTRA Foundation COVID-19 Disaster Fund, the Motion Picture and Television Fund and the Actors Fund Emergency Assistance in the US, and $1 million between the AFC and Fondation des Artistes in Canada,” the company said.

Roku told investors today that it added around 3 million active users in the first quarter, upping total participants in its OTT device ecosystem to 39.8 million.

(Roku is the leading OTT ecosystem in the U.S. But Amazon's Fire TV, which reported 40 million global users in January, leads the international market.)

With the tail-end of the Q1 period marked by altered shelter-in-place viewing habits, total hours spent streaming video via Roku was up year over year by 49% to 13.2 billion. Sequentially, viewership was actually down from Q4, but Roku attributed much of this to a new "Are You Still Watching?" feature that shuts down measurement if a user isn't actually tuned in anymore.

Visit Next TV to read more stories like this one. 

Roku isn’t slated to present first-quarter earnings until May 7. But the rapid deceleration of the global economy is forcing it and a lot of other companies to revise their full-year 2020 forecasts.

For the first quarter, Roku expects revenue to be slightly higher than originally projecting, coming in between $307 - $317 million. Losses (between $55 million - $60 million) and the rest of the other key Q1 metrics should be in line with guidance.

Beyond that? Hard to tell, given the hazy economic outlook wrought by the pandemic.

“While we believe that our offerings to consumers, content providers and advertisers will enable our company to deliver value in these uncertain times, the wider business and consumer impacts, as well as the duration of the pandemic, are unclear and thus we are withdrawing our prior 2020 outlook,” said Roku CFO Steve Louden, in a statement.

Added Roku CEO Anthony Wood: “Consumers are turning to Roku now more than ever. As the leading TV streaming platform in the U.S., Roku is proud to provide easy access to live news, free movies and TV, great paid content, and helpful programming for individuals and families who are sheltering at home. We have been working closely with advertisers to help update their plans to reflect new viewing patterns and adjust their overall marketing mix which has been affected by social distancing. While we expect some marketers to pause or reduce ad investments in the near term, we believe that the targeted and measurable TV ads and unique sponsorship capabilities that Roku offers are highly beneficial to brands today.”

Discovery Communications reported higher first quarter earnings despite a slow U.S. ad market and foreign currency headwinds.

Net income rose 9% to $250 million, or 37 cents a share, from $230 million, or 33 cents a share a year ago.

Revenues rose 9% to $1.6 billion.

"2015 is off to a great start, as our strategy of investing in and owning world-class content to leverage across our unparalleled global distribution platform continues to drive operating momentum and strong financial results," said CEO David Zaslav in a statement. "Despite facing a challenging U.S. marketplace and foreign currency headwinds, Discovery is successfully building market share, expanding our distribution and developing programming that resonates with audiences around the world. I'm extremely pleased with our strong performance this quarter and the numerous opportunities Discovery has in the months and years ahead."

Read more at Broadcastingcable.com.

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Charter Communications, which is expected to make a bid soon for its former paramour Time Warner Cable, lost 7,000 basic video customers in the first quarter, while managing to grow revenue by 7.3% and cash flow by 4.2%. Excluding a $21 million charge related to Comcast transactions, cash flow would have risen 7%.

The results were almost a polar opposite to TWC's, which yesterday reported strong subscriber growth across its various business lines, but missed on financial targets. For Charter, customer growth was down from the previous year, while revenue and cash flow soared.

Aside from the basic video losses, which reversed a gain of 18,000 video customers in the prior year (it also had 15,000 fewer bulk digital upgrades this year) customer relationships rose  by 86,000 in the period, short of the 112,000 additions in the same period last year. In addition, high speed data customers rose by 125,000, compared to a 136,000 gain in the prior year. Voice additions also lagged from the prior year, with 42,000 new phone customers in the period, versus 52,000 additions in 2014.

"Our first quarter results continue to demonstrate the sustainable growth trajectory of our operating strategy to provide high quality products and service at an attractive price," said Charter CEO Tom Rutledge in a statement. "Our continued customer relationship growth reflects the growing value and utility of our offerings and higher levels of customer satisfaction. Our subscriber and revenue growth, combined with declining capital intensity, is leading to meaningful free cash flow growth."