NEW YORK (AP) — Comcast's profit rose 12 percent in the July-September quarter thanks to the Olympics and the first third-quarter gains in video subscribers in a decade.
NBCUniversal CEO Steve Burke has said that the company made over $250 million in Rio as ad sales rose, even though Olympics ratings fell 16 percent in prime time on NBC from the London Olympics. Ratings were down 9 percent if viewers watching on NBCUniversal's cable channels and digital were added.
The cable giant has been winning back video subscribers despite an overall drop in the number of people who pay for traditional TV. There has also been a trend toward smaller audiences, even for big sporting events like NFL football and the Olympics.
It credits that to customer-service improvements and its fancy X1 cable box, which the company says helps retain customers. Subscribers who have X1 tend to spend more on DVRs and pay-per-view. Some 45 percent of Comcast's video households have X1 now. Analysts also say it has been winning customers from some competitors like Dish and AT&T's U-verse TV service, since the telecom giant is now focused on DirecTV instead.
But new online TV services meant to replace a cable subscription could put a brake on those trends. AT&T is coming out with DirecTV Now next month, and Hulu plans one for next year; Dish Network's Sling and Sony PlayStation Vue are already out there. While these cheaper bundles are mostly targeted at the estimated 20 million people who have already dropped cable or never had it, they may take customers from cable companies like Comcast. But at the same time, Comcast's NBCUniversal arm could benefit because its networks are on the streaming services.
Comcast CEO Brian Roberts on a conference call with analysts Wednesday maintained that he has "a healthy degree of skepticism" that these new streaming TV services will "create millions and millions of subscribers anytime soon," and most people value their cable and satellite subscriptions. But they could be "a modest positive" for NBCUniversal over the years, he said.
In the third quarter, Comcast added 32,000 video customers, compared with a 48,000 loss a year ago — the first third-quarter gain since 2006. It gained 330,000 internet customers, compared with 320,000 a year ago. Phone customer additions fell to 2,000 from 17,000.
The Olympics broadcast in August gave a big boost to NBC and the company's cable networks. Revenue rose 57 percent to $3.09 billion in the broadcast unit, which is NBC and Spanish-language Telemundo, and gained 22 percent to $2.94 billion at the cable-networks division, which includes MSNBC, Bravo and USA Network.
Revenue fell 8 percent in the movies division, which raked in cash last summer with the blockbusters "Jurassic World" and "Minions."
Overall, Comcast net income climbed to $2.24 billion from $2 billion in the same period a year ago. Revenue increased 14 percent to $21.32 billion.
Its Class A shares fell $1.83, or 2.8 percent, to $62.69 in afternoon trading Wednesday. Its stock had gained 14 percent in 2016 through Tuesday's close.
This story has been corrected to show net income was $2.24 billion, not million.