Tech Companies Can’t Ignore Broadband Prices

Enough with the chatter about Elon Musk and Mark Zuckerberg. Let’s talk about ordinary people for a second. If you’re in that group (and let’s face it, we can’t all be billionaires), then you may be aware that nowadays you’re spending more on broadband than you might have a few years ago. In fact, we may all find we’re spending more and more over time. The firms that provide high-speed internet are starting to run out of potential new customers—86% of U.S. households already have some version of it, according to research firm MoffettNathanson. What growth is left is mostly in rural areas served by satellite (such as Musk’s Starlink) or cell operators, whereas cable operators are basically flatlining.

To show revenue growth, cable firms are increasingly focused on extracting more money from existing customers, either by persuading them to sign up for a faster tier (I fell for that one—2 gigs seems to make zero difference!), or by raising prices, or both. Exhibit A of that trend is Comcast, which reported on Thursday that its average revenue per broadband customer rose 4.5% in the June quarter, even as the number of its broadband customers fell for the second time in the past 12 months. As a result, Comcast still managed to report higher U.S. broadband revenues. Given how subscriber growth rates are beginning to stagnate, that’s likely to be the trend of the future. And that’s an issue for anyone who charges for online content of some kind, including Netflix and other streaming services, news publications and even Twitter (or as Musk likes to call it, X) through its Blue verified subscription offering.