Media

Former DirecTV CEO White: Cord cutters don't matter if broadband is the future

Key Points
  • Cord cutters are real, but companies like Comcast and AT&T are well-poised for a future in broadband.
  • Former DirecTV CEO Michael White recommends assessing cash flow, rather than cable subscribers, as a measure of companies' health.
Former DirecTV CEO talks changing media landscape and effect on earnings
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Former DirecTV CEO talks changing media landscape and effect on earnings

Former DirecTV CEO Michael White isn't too worried about cord cutters.

Recent evidence suggests that large numbers of subscribers, a large share of them being millennials, are actively canceling cable packages. For White, however, broadband is the future, and already a major revenue generator as more consumers flock to streaming platforms to consume content, he told CNBC on Thursday.

"The whole issue of the growth in streaming: Millennials' habits are different. There's no question about that," White said. "You are seeing cord cutting, that's a reality. The advantage is, we can sell broadband still."

With products like DirecTV Now — an online subscription streaming service made with broadband users in mind — DirecTV and parent company AT&T feel prepared for the shift. However, White didn't write off the struggle cable-forward companies are facing.

Companies like Comcast and AT&T, which routinely report subscriber metrics on quarterly earnings, appear to be taking a hit from customers ditching pricey cable packages.

This quarter, Comcast reported its largest quarterly loss of cable subscribers in three years. The company now has 25 million broadband customers, compared to 22 million for video. However, Comcast emphasized that broadband now makes up the majority of the company's cash flow, CEO Brian Roberts told CNBC's "Squawk Box" recently.

As far as big players in cable go, White doesn't anticipate them picking up wireless to attract or retain customers. While bundled packages, which provide cable, wireless and phone service, may be beneficial for churn, he recommended those companies stick to what they know.

"If you can sell more good products to good customers, it's better than chasing customers you don't know," White said.

Comcast is the owner of NBCUniversal, the parent company of CNBC and CNBC.com.