Comcast stock rose more than 3% in early trading Thursday after the cable operator posted improved subscriber metrics in the third quarter and dampened any speculation that over-the-top offerings would affect its overall business.
Comcast stock was up as much as 3.2% ($1.64 per share) to $53.13 each. The stock settled down later in the day to $52.94 each, up 2.7%.
The nation’s largest cable operator seemed to lift investor spirits with improved video customer metrics – it lost 81,000 basic video subscribers in the period, its best Q3 showing in seven years – and assurances that recent over-the-top offerings from Home Box Office and CBS won’t cut into its business.
HBO announced plans to make its premium channel available online without a pay TV subscription on Oct. 15. HBO chairman and CEO Richard Plepler has said the service, which will be available sometime next year, will initially target broadband-only customers and that the premium service will partner with pay TV distributors. The next day, CBS announced a $5.99 per month over-the-top service that will include live local programming from CBS owned and operated stations in 14 markets as well as on demand episodes of network shows like The Good Wife, Survivor and Blue Bloods.
NBC Universal CEO Steve Burke said he was surprised by the OTT announcements.
“I was surprised by both of them for different reasons,” Burke said on a conference call with analysts. “CBS I was surprised because they have been such a defender of retransmission consent and the traditional ecosystem and have been so successful in the broadcast business. And HBO because I think it’s going to be such a challenge for them to not cannibalize what is already a really, really good business for them. That having being said, we’re so early on in the transition to more Internet television that I think we are going to see a lot of surprising things.”
But Burke also called for perspective
“I don’t think distributing directly to consumers via the Internet is an easy thing to do,” Burke said.
On the programming side, Burke said that NBU will invest more in original programming on its USA Network – he didn’t say how much – adding that the programmer had been known for “blue-sky procedurals” and could see more “edgier” shows, as well as sports programming from other NBCU channels.
Comcast Cable CEO Neil Smit also chimed in when asked if HBO’s OTT offering would cut into the core business. He noted that Comcast was the first cable operator to introduce Internet Plus, a package of high-speed data service and HBO to consumers, a relationship he expects to continue. And he added that the operator’s X1 platform has been a strong retention tool for customers and is driving more linear TV viewing even among younger consumers.
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