America’s Largest Cable Company, Comcast, Sees Internet Subscriptions Pass TV

Maybe the cable cutting is real.

That’s one take home that can be drawn from comments made by America’s largest cable services company — Comcast Corp. (CMCSA) — during its Q1 2015 earnings call.  In the call Comcast confirmed that its internet subscriptions had eclipsed its pay TV subscriptions midway through its Q2, which is currently in progress.

This changing of the guard wasn’t altogether unexpected.  Comcast ended Q4 2014 with 21.962 million high speed internet customers and 22.383 million video customers.  In 2014 on a year to year basis, internet subscriptions were up roughly 6 percent, while video subscriptions declined approximately 1 percent.

Q1 2015 saw video and internet subscriptions creep closer to the symbolic milestone, with 22.369 million high speed internet customers and 22.375 million video customers.

It’s getting hard to ignore the “cable cutting” trend of people dropping paid video, and solely using high speed internet data. [Image Source: Shutterstock]
And this morning, during an earnings call Neil Smit, CEO & President of Comcast Cable, remarked [PDF] in answer to a question:
Broadband has in fact surpassed video in terms of the number of subs. It is a less mature market so we think there is room for growth. We believe we are increasing share and the market is growing. We do target HSD [high speed data] to satellite video households where we can use HSD has a foot in the door and then expand the relationship from there.
In many ways Comcast is more dominant in the high speed data (HSD) market than the video market.  For Comcast this is a pleasing accomplishment, but also a roadblock from a regulatory standpoint.  Indeed, it was Comcast’s especially dominant internet services position that ultimately led regulators to encourage the cable company to drop its bid for the market’s second largest cable company, Time Warner Cable, Inc. (TWC).

From a broader perspective the milestone is also meaningful as it suggest more Americans are willing to pay for high speed data than for premium video.  Read into that what you will.

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