Jeff Kagan: Comcast remains strong as cable TV industry changes

Jeff Kagan  |


Last week I was interviewed by Bloomberg about Comcast. This was a very important discussion, so I wanted to share some thoughts with you. Comcast has changed so much over the last decade and today they are still a strong and growing company. So, let’s take a closer look at what we can expect not only from Comcast, but the entire cable TV industry going forward.

Taking a closer look at Comcast shows how their business has changed over the last decade. In fact, if we pull the camera back, we can see how the entire industry and in fact the entire telecommunications space is changing and will continue to change over the next decade.

Ten or fifteen years ago, the cable television industry was focused on cable TV. It had no real competitors other than companies like DirecTV and DISH Network. However, over the last decade we have seen enormous changes impacting the entire industry. Only some cable TV companies continue to do well.

Comcast growing with Internet, Xfinity Mobile, pay TV, telephone

While these changes threatened the cable TV space, some competitors seem to be weathering the storm. In fact, looking at Comcast recent earnings we can see growth, strength and health as they expand into other businesses.

While ten years ago, cable TV companies were basically television providers, today they also sell Internet, telephone and now wireless with Xfinity Mobile.

In fact, over the last decade we have seen the business model changes. Today, cable TV company’s primary growth engine is no longer cable TV. Today, it is high-speed Internet.

They also focus on pay TV, telephone and wireless as four legs to their stool, but I see Internet as the center of the universe for this industry.

That means the very fabric of many cable TV companies has changed over the last decade, and it will continue to change over the next decade.

Comcast Xfinity sticking with change wave in Pay TV

The good news is, Comcast Xfinity is staying with the changing growth wave. This growth wave or change wave I frequently discuss, is continually moving across the industry and changing everything.

Over the last ten years it changed everything in the previously sleepy cable TV space. And that change will continue and accelerate over the next decade.

A decade ago Comcast had no real competition except DirecTV and DISH Network. Then AT&T and Verizon entered the pay TV space with Uverse and FiOS. Next, AT&T acquired DirecTV and created DirecTV NOW. This is an expanded pay TV offering. Then they introduced wireless pay TV.

Competition will heat-up with 5G wireless pay TV

Over the last decade, we have seen plenty of new competitors enter the pay TV space. Companies like Netflix, HULU, Facebook TV and many more. Plus, there are countless other companies who will enter this space in coming years as well.

5G wireless will create a new opportunity for new competitors. It will deliver full-fledged pay TV wirelessly. That means you can watch at home or anywhere in the United States.

This will bring continued pressure on the traditional cable TV model. Providers need to transform with the industry or else they will face problems going forward.

During the last decade, Comcast saw the writing on the wall and created Xfinity. This new brand represents tomorrow. Years ago, when they launched this brand it didn’t make much sense. It does today.

Comcast Xfinity acquired NBC Universal which is unique growth opportunity

Today, Comcast using the Xfinity brand partners with Netflix and lets their customers access this service. Partnering with a potential competitor is smart. It lets Comcast hang onto their pay TV customers and continue to grow with other services as well.

Comcast has also diversified much more than other cable TV competitors. Comcast acquired NBC Universal. This has given them new areas of synergy and growth.

Recently, AT&T acquired Time Warner. They changed the name to WarnerMedia and I expect with their DirecTV NOW, they will have the same growth opportunity in coming years.

Both Comcast and AT&T are leaders in their changing and expanding industries. The only difference is Comcast comes from cable TV and AT&T comes from the wireless and telephone world. However, going forward I see these two companies are direct competitors.

This seems to be the new direction of the industry. A blending of wire line, wireless, pay TV, content and entertainment and more. Let’s see which other competitors follow this path. We are still early in the transformation. There are still plenty of years to go. So, I see much more activity on the radar.

Xfinity Mobile, Spectrum Mobile, Altice Mobile creates sticky-bundle

Bottom line, Comcast Xfinity and Xfinity Mobile remain strong competitors as the space changes all around them. They are doing the right things. They are staying with the moving change wave. They are remaining competitive.

Comcast reports they added 227,000 new Xfinity Mobile customers giving them 1.2 million subscribers to date. This helps them create a sticky-bundle which helps them keep their customers. This is doing exactly what the company wants.

Plus, over the last several years they have also been focused on keeping the customer happy. This is a plus as they face increased competition. As the entire industry faces more changes.

The success that Comcast is having is proving to be a lesson to Charter Spectrum and Altice. Charter has recently introduced Spectrum Mobile and Altice Mobile should be introduced later this year. While it’s too early to tell the level of success for Spectrum Mobile, they have the same opportunity as Comcast.

So, the major, traditional cable TV providers are making the leap into tomorrow. It’s impossible to see which companies will succeed and which will fail five years from today. With that said, to date, Comcast is hitting the ball out of the park. Stay tuned. We are just in the middle of this great industry-wide transformation.


Jeff Kagan is an Equities.com columnist. Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst, speaker and consultant. He follows wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, Mobile Pay, FinTech and communications technology. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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