Digital subscribers continued to grow at a rapid rate for Comcast Corp. during the first quarter, and digital cable is helping to ward off direct-broadcast satellite penetration.
Revenue for the quarter was up 33.5 percent, to $1.86 billion, and operating cash flow rose 38.1 percent, to $425.1 million. On a pro forma basis, revenue was up 11 percent and operating cash flow was up 8 percent during the period.
Comcast reported a net loss during the quarter-mainly due to acquisition costs for Jones Intercable Inc. and Lenfest Communications Inc.-of $199 million, or 24 cents per share, compared with a profit of $73.5 million (10 cents) in the same period last year.
At QVC, Comcast's home shopping channel, consolidated revenue was up 14.1 percent to $741.3 million and operating cash flow rose 10.6 percent to $144.8 million.
Comcast's digital-cable offering added 172,000 new subscribers in the period, or 13,200 new subscribers per week. The digital-subscriber additions are triple that of the same period last year.
Comcast executive vice president and treasurer John Alchin said in a conference call with analysts that penetration rates for the digital product are 12.5 percent in markets where the company is adding the service.
The digital offering is also making headway against DBS. Alchin said DBS penetration in Comcast digital-cable markets is about 6 percent, compared with 10 percent nationally. He added that Comcast claims a 90 percent share of net multichannel-video-customer additions in those markets.
"What that means is that for every dish customer, we get nine customers," Alchin said. "We're not seeing any impact [from DBS] local-into-local. We're seeing 1.5 percent subscriber growth versus 1.4 percent growth where local-into-local is available."
Comcast raised its projections for digital subscribers for the year to 1.25 million from 1 million.
Revenue-generating units-or subscribers who take either high-speed data or digital-increased to 965,000, about 4.6 times the number reported in the first quarter of last year.
Comcast finished the quarter with 195,000 high-speed-data subscribers, an increase of 41,000 customers in the period. Comcast installed about 3,100 data customers per week during the period, up from 2,200 per week in the first quarter of 1999.
As a result, Comcast has revised its data-subscriber projections for the year from 300,000 subscribers to 350,000. The company expects its high-speed-data footprint to cover about two-thirds of total homes passed by the end of the year.
Comcast Cable Communications Inc. president Steve Burke said the company is conducting about a half-dozen trials of video-on-demand and interactive television, and it could move from trials to pilots in some markets by the fourth quarter, making 2001 the likely rollout year for those services.