The coronavirus pandemic hammered Comcast during the second quarter this year, as theme parks closed, sports were postponed, and almost half a million customers cut the cord.
The Philadelphia media giant's profits fell 4.4% to nearly $3 billion from April through June, the company reported Thursday. Comcast lost 477,000 cable TV customers, while NBCUniversal's revenues dropped more than 25%. Though its broadband business continued to boom, the company saw revenue declines across almost all other segments.
Consumers have been cancelling pay TV plans at record numbers this year, even though the coronavirus has kept them home and, presumably, in front of their TVs. The pandemic accelerated the cord-cutting trend by suspending live sports and putting households on tighter budgets, industry analysts said. The virus also paused production of new shows -- so entertainment offerings became stale -- and forced bars, hotels, and other businesses to cancel their TV plans, too.
"What you have is kind of almost this perfect storm with a lack of sports, you have an economic downturn, you have rising unemployment, and so people are kind of feeling the pinch," Bloomberg analyst Geetha Ranganathan said earlier this week. "Plus, you have a variety of streaming options that are available for a much more economical price point."
The 477,000 TV customers that Comcast lost during the three-month period is nearly two-thirds of what it lost in all of 2019, when it shed 733,000 video subscribers.
Cord cutting isn't all bad news for Comcast. The company's cable unit has pivoted to the more profitable broadband service, and in the second quarter gained 323,000 internet customers. Revenue from high-speed internet was up 7.2% to $5 billion. The company's new NBCUniversal streaming service, called Peacock, has 10 million sign ups.
"Our response to COVID-19 has been extraordinarily fast and effective, and our products and brands continue to resonate strongly with our customers across all segments and all geographies," Comcast chairman and CEO Brian L. Roberts said in a statement. "The solid results that we delivered in the quarter highlight the resilience of our company."
But NBCUniversal's cable networks, such as Bravo and USA Network, are exposed to the cord-cutting woes and changing media landscape. Consumers are increasingly turning to Netflix, Hulu, and other streaming services for movies and shows.
Revenues at the company's cable networks were down 14.7% to $2.5 billion during the second quarter. Advertising revenue for the networks fell 27% to $679 million, while ad revenue for broadcast networks NBC and Telemundo dropped 28% to $959 million.
"Unfortunately, Comcast sort of has one foot in the cable business that is doing very well, and one foot in the media business that isn't," Craig Moffett, of the New York market research firm MoffettNathanson, said earlier this week."The whole idea of cable networks is rapidly becoming obsolete. And so, networks like USA (Network) are anachronistic and will never come back."