Comcast Is Now an Internet Company

We’ve been watching this one for a while, and now we are just about there: Comcast, the biggest cable company in the US, is about to become a broadband company --- meaning it has more high-speed Internet subscribers than pay-TV subscribers. In fact, maybe we’re already there. Comcast announced that it ended the first quarter of the year with 22,375,000 cable TV customers, and 22,369,000 broadband customers. That’s a gap of a mere 6,000 subscribers. But those numbers were as of March 31, so perhaps Comcast has already tipped over. In any case, it’s safe to assume that we’ll keep seeing numbers like the ones Comcast recorded -- last quarter it added 407,000 Internet customers and lost 8,000 video customers -- so when Comcast comes out with its new report in three months, it will be a done deal.

For now, video creates much more revenue than Internet does for Comcast -- the segments generated $5.3 billion and $3 billion, respectively, last quarter. But Internet is a much higher margin business than video, since you don’t have to pay anyone to program the Internet. In 2014, Comcast spent $9.8 billion on programming, or nearly half of the $20.8 billion it generated from pay-TV subscriptions. (Then again, Comcast creates some of those license fees itself via its NBCUniversal* unit, which generated another $6.6 billion last quarter.)