Comcast 2012 Annual Report Download - page 54

Table of Contents
High-Speed Internet
As of December 31, 2012, 36% of the homes and businesses in the areas we serve subscribed to our high
-
speed Internet services,
compared to 35% and 33% as of December 31, 2011 and 2010, respectively. High-
speed Internet revenue increased in 2012 and
2011 primarily due to increases in the number of residential customers, rate adjustments and additional customers receiving higher
levels of service.
Voice
As of December 31, 2012, 19% of the homes and businesses in the areas we serve subscribed to our voice services, compared to
18% and 17% as of December 31, 2011 and 2010, respectively. Voice revenue increased in 2012 and 2011 primarily due to
increases in the number of residential customers receiving multiple services, while rates have remained relatively flat.
Business Services
Our business services revenue is generated primarily from the Internet, voice and video services we offer to small and medium-
sized
business customers, and from the sale to medium-
sized businesses of our metro Ethernet network services. We also provide cellular
backhaul services to mobile network operators, which help our customers manage continued growth in demand for network
bandwidth.
Business services revenue increased in 2012 and 2011 primarily due to increases in the number of business customers, and our
expansion of services to medium-sized business customers, including metro Ethernet network and cellular backhaul services.
Advertising
As part of our distribution agreements with cable networks, we generally receive an allocation of scheduled advertising time on cable
networks that we may sell to local, regional and national advertisers. In most cases, the available advertising time is sold by our
sales force. In some cases, we work with representation firms as an extension of our sales force to sell a portion of the advertising
time allocated to us. We also coordinate the advertising sales efforts of other multichannel video providers in some markets. In
addition, we generate revenue from the sale of advertising online and on our On Demand service.
Advertising revenue is affected by the strength of the local advertising market and general economic conditions. Advertising revenue
increased in 2012 due to increases in political advertising revenue and improvements in the local and regional advertising markets,
primarily driven by increased spending from automotive customers. Advertising revenue declined slightly in 2011 due to lower
political advertising.
Other
We receive revenue related to cable franchise and other regulatory fees, our digital media center, commissions from electronic
retailing networks, and fees from other services. Cable franchise and regulatory fees represent the fees required to be paid to
federal, state and local authorities that we pass through to our customers. Under the terms of our cable franchise agreements, we
are generally required to pay to the franchising authority an amount based on our gross video revenue. The changes in franchise
and other regulatory fees collected from our cable services customers are generally due to changes in the revenue on which the fees
apply.
Cable Communications Segment – Operating Costs and Expenses
We continue to focus on controlling the growth of expenses. Our operating margin, which is our operating income before
depreciation and amortization as a percentage of revenue, for 2012, 2011 and 2010 was 41.0%, 41.1% and 40.4%, respectively.
51
Comcast 2012 Annual Report on Form 10-
K