Coming off a quarter in which it added 89,000 video subs, Comcast said it continues to make progress with the deployment of X1, its IP-capable video platform for set-tops and mobile devices.
Comcast added 1.1 million customers to X1 in Q4, a 73% increase from the year-ago period, Michael Cavanagh, Comcast’s SVP and CFO, said on Wednesday’s earnings call.
About 30% of Comcast’s total video sub base is now on X1, he said. Comcast ended 2015 with 22.34 million video customers, so more than 7 million are now on the platform, which features a cloud-based UI.
Later in the call, Neil Smit, president and CEO of Comcast Cable, said the MSO's current rate of deployment, at about 40,000 X1 boxes per day, will get Comcast "in the range of 50% of the footprint covered by the end of the year."
X1 “is a real game-changer,” Smit said, noting that 60% of net new connects in Q4 were for X1. He said 34% of Comcast’s subs are using some form of TV Everywhere, and that viewing hours on the MSO’s TVE Website and mobile apps are up 20%.
Cavanagh also presented some other video stats, noting that Comcast now has 75,000 shows available on VOD, including 700 full-season stacked series, and 98 live TV channels that are available out of the home via the MSO’s TV Everywhere apps.
On the data side, he said 77% of Comcast’s high-speed Internet subs are on a tier that provides at least 50 Mbps (downstream) and that 74% of HSD subs have one of Comcast’s wireless gateways.
A continued growth driver is business services, which saw revenues climb 18.9%, to $1.3 billion in Q4, establishing a $5.2 billion annual run rate. Though the bulk of those revenues come from small businesses, a growing amount is coming from mid-sized businesses (Comcast said it has less than 10% of that market). It’s also making progress with its new initiative to pursue deals with large, Fortune 1000 enterprise customers. Cavanagh said Comcast has more than 20 large enterprise customers on board and multiple “eight-figure deals” already signed.
Cable-related capex in Q4 rose 10.2%, to $2.1 billion, driven by spending on CPE for X1 and wireless gateways, investments in network infrastructure and capacity, and its ongoing expansion into business services.
In 2016, cable capex will remain flat – about 15% of revenues.
Comcast was asked about the new set-top box rules being proposed by FCC chairman Tom Wheeler, and said it needs to see more about what’s in the proposal, but doesn’t believe that another technology mandate is the right answer.
"I think it's premature to comment on this since the proposal has not even been seen yet,” Smit said. "We believe that, generally speaking, in a dynamic environment that's rapidly changing, technology mandates just don't work very well. But we look forward to seeing the proposal and we'll work with the chairman and his office to come up what's best for the customers."
Comcast, though, has already lashed out at Wheeler's proposal, arguing that opinion that the rules, if they go forward, threaten to “stifle TV innovation.”
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