Despite churning digital customers at the rate of 60% anually, Comcast dismissed concerns, insisting that its customer turnover is really not any worse than that seen by DBS companies.
Comcast Cable President Steve Burke acknowledged that the company's digital churn rate is running about 5% per month, a rate that even exceeds the aggravatingly-high churn rates of pay services like Home Box Office and Showtime. But Burke contends that half the digital churn comes from subscribers moving. About one percentage point comes from people changing adding or dropping tiers, but still remaining digital subscribers. The rest comes from subscribers dropping back to basic cable.
"We believe our true digital churn is about 1.5%," Burke said. "We believe our net digital churn is on par with satellite." DirecTv and Echostar executives have used the high churn numbers to argue that digital cable is not as much of a threat as many investors fear. Other cable operators have seen digital cable churn rates as high as 8% monthly, settling back down to 5-6%.
Burke contends that in areas where Comcast has launched digital cable, it signs up 10 times as many subscribers as the two DBS companies do. "I'm optimistic vis-à-vis satellite," Burke said. "I think we've seen the brunt of it with local-into-local."
- John Higgins
