Last month Comcast chairman and CEO Brian Roberts said at an industry conference that he expected Q3 to be a strong one for its cable unit, and on Thursday morning he delivered, as the cable company reported its best ever increases in broadband subscribers.
Comcast added 633,000 broadband customers, far exceeding its previous record of 586,000 additions set in Q1 2007 and outpacing Roberts’ predictions of more than 500,000 last month at the virtual Goldman Sachs Communacopia conference. Video customers declined by 273,000 in the period, an improvement over the 427,000 it lost in Q2 and slightly higher than the 222,000 it lost in the prior year. Revenue at the cable unit was up 2.9% to $15 billion while adjusted EBITDA rose 10.5% to $6.4 billion, a testament to the gains in the high-margin broadband segment.
But it wasn’t enough to outpace the bloodbath at its NBCUniversal unit, which has been hit hard by the pandemic, as its Theme Parks were shut down and Filmed Entertainment was hamstrung by theater closures across the country. Consolidated revenue was down 4.8% to $25.5 billion and adjusted EBITDA fell 11.3% to $7.6 billion.
The cable gains were offset by continued losses at the programming unit, NBC Universal. NBCU revenue was down 18.9% to $6.7 billion, driven by heavy declines at its Theme Parks and Filmed Entertainment units. Theme Park revenue slid 80.9% to $311 million and Filmed Entertainment sales fell 25%to $1.28 billion. At its Cable Networks, revenue was down 1.3% to $2.7 billion. Broadcasting revenue rose 8.3% to $2.4 billion, as higher content licensing and distribution outpaced advertising declines. Adjusted EBITDA at NBCU was down 38.7% in the period to $1.3 billion, led by big declines at Theme Parks (-127.7%), and Cable Networks (-8.9%).
“We are nearly eight months into this pandemic – and despite many harsh realities, I couldn’t be more pleased and proud of how our team has worked together across the company to find safe and creative solutions to successfully operate in this environment,” Roberts said in a press release. “We are executing at the highest level; and perhaps, most importantly, accelerating innovation, which will drive long-term future growth. This third quarter, we delivered the best broadband results in our company’s history. Driven by our industry-leading platform and strategic focus on broadband, aggregation and streaming, we added a record 633,000 high-speed internet customers and 556,000 total net new customer relationships. At the same time, we’re growing our entertainment platforms with the addition of Flex, which has a significant positive impact on broadband churn and customer lifetime value. Our integrated strategy is also driving results in streaming with nearly 22 million sign-ups for Peacock to date, and we are exceeding our expectations on all engagement metrics in only a few months. And Sky continues to add customer relationships at higher prices while reducing churn to all-time lows in our core UK business. Going forward, and as we emerge from the pandemic, we believe we are extremely well positioned to provide seamless and integrated experiences for our customers and to deliver superior long-term growth and returns for our shareholders."
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Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.