By Will Skalmoski

Comcast Corporation
Comcast Center
1701 JFK Boulevard
Philadelphia, PA 19103

About
Ralph Roberts founded Comcast Corporation with the purchase of a 12,000-subscriber cable system in Tupelo, Mississippi in 1963. The corporation now includes two businesses, Comcast Cable and NBC Universal. Comcast Cable provides media and broadcasting services including video streaming, high speed Internet, cable television, and communication services. Comcast Cable has grown to be the largest cable provider in the United States. [1]

Key Executives [2]

Images from the Comcast Executives Page

 

 

 

Financials and Strategies
Comcast is a publicly traded company, traded at a price between $50 to $60 per share throughout 2015. Comcast reported a past year of consistent growth, reporting a year end 2014 revenue of over $68 billion, $17.7 billion of which took place in the fourth quarter of the year. Growth of 6.4% and 4.8%, respectively, has poised the corporation for another successful year in 2015. [3]

Growth in revenue has defied the corporation’s loss in pay-TV subscribers. Industry wide, nearly 100 million Americans pay for TV. Each year, cable providers have been losing a combined average of nearly 100,000 subscribers. Comcast has resisted this exodus by increasing their bundling options, providing both internet and communications services in the process. [5]

For the past year, Comcast has been engaged in a highly publicized effort to merge with Time Warner Cable. The announcement boosted CMCA stock 5% over the past year, though the merger has been restricted by the FCC since then. If the deal is approved, Comcast will pay nearly $45.2 billion to complete the merger. [6]

There have been few developments in this in 2015. The FCC allows 180 days for review by the Justice Department, a time limit that has been stalled for Comcast/TimeWarner as of March 13, 2015 [6]. This has lead many industry insiders and analysts to speculate a declined deal; however, in February, Brian Roberts publicly reassured shareholders that the deal will be completed in 2015. This rhetoric has been consistent throughout the year. [7]

Comcast argues that both companies must grow together in order to compete with AT&T, Apple, and Google—all of which are considerably larger than the two corporations [8]. This stance has been refuted by many consumer groups who fear a single company that controls a majority of the nation’s broadband subscribers, including an estimated 50% of the high speed internet market [7]. California has quickly become the largest battleground for the merger so far this year [8].

2015 Ventures and Complications

X1 Operating System

In 2014, Comcast launched its IP-capable X1 operating system, lauded in their yearly report as “the best video platform and user interface in the market.” The company also revealed a distribution of over 5 million X1 boxes. The platform, spanning XFinity cable, DVR service, Internet, and TV interactivity, has undergone change and growth in 2015. [9]

Most changes and improvements have focused on the user experience. In January, Comcast added a categorical sport feature, along with a tab for recently watched programs. Technologically, the service launched improvements on the X1 remote, allowing better reading of voice commands and battery conservation [10]. That same month, Xi4, the newest X box, would be presented to the FCC. Aiming at conserving power and allowing better quality, Comcast hopes to utilize this new technology this year. [11]

In February, the service premiered movie bundling, allowing users to purchase multiple movies in a packaged deal (i.e. sequels, similar genres, etc.). Additionally, Comcast adjusted the Xi3 to allow buffering of live TV, allowing users to time shift within a span of 25 minutes. [12]

In April, Comcast has reach 12 deals with schools to provide XFinity on Campus, a university-customized bundle of its service. The XFinity on Campus deal includes TV, video on demand, premium channels, and sports packages and uses the school’s Wifi [13]. Additionally, X1 added HD movies and accessibility features for disabled users.

The consistency of improvements on X1 may be influenced by Apple’s intended launch of a Pay TV platform this fall. Though originally reported that the two companies would partner with one another, it seems that Comcast has pushed forward independently [14]. Other competitors in this space include Sony, Dish, CBS, HBO, Verizon, and Showtime [15].

FCC Net Neutrality
As recent laws regarding net neutrality were discussed and passed in late 2014 and early 2015, companies like Comcast, TimeWarner, and AT&T faced a great deal of uncertainty. With X1, Comcast has increased their dependence on Internet television, making this decision important.

Comcast has championed the new actions. In a November 2014 letter to shareholders, Comcast Executive VP David Cohen stated the companies support for an open internet. [17]

In January 2015, the legal definition of “broadband” changed, increasing the rate of connection from 4 mbps to 25 mbps. With this increase, the Comcast/Time Warner broadband marketshare increases, adding possible conflict to an FCC decision regarding the merger. [18]

In February 2015, as it became clear that the FCC would not attempt to control pricing, Comcast and TimeWarner stock jumped in response. This decision bodes well for the company. [19]

As of April 2015, only one of these companies has contested the law. On April 14, AT&T sued the FCC in an attempt to overturn the new net neutrality rules. The company disagrees with the government’s classification of the Internet as a telecommunications service. [20]

Customer Service Issues
In early 2015, Comcast has found itself embattled with its hometown population. In Philadelphia, nearly three quarters of the cable-subscribing population reported dissatisfaction with the corporation’s customer service.

This complicates Comcast’s quest for a franchise renewal. A franchise allows use of public infrastructure to service customers. Comcast has had exclusive rights in Philadelphia for the past 15 years, and they are seeking to renew a similar deal. [21]

Future
At this point in time, it is impossible to predict the decision on the Comcast/TimeWarner merger. As analyzed above, a merger has the potential to impact both companies in a tremendous way.

This will also impact the competition between Comcast and Apple for pay TV customers this fall. With additional customers and resources, Comcast could potentially overpower efforts made by Apple.

X1 and its platforms will continue to improve with user feedback and increased technology.

Michael Angelakis is leaving his position as CFO to start an investment fund valued at $4 billion. This fund manages Comcast money in a new way, and he will seek to improve the company’s assets from outside of the cable business. [22]

Overall, Comcast remains a strong, powerful company. As the leading cable service provider, it will seek to diversify and expand in an ever-changing media landscape.

 

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1. Comcast Timeline. Comcast Corporate Website, retrieved 12 April 2015.

2. Comcast Company Profile. Bloomberg Business, retrieved 12 April 2015.

3. Comcast Q4 Report. Comcast Corporate Website, retrieved 12 April 2015.

4. Comcast Stock Profile. Google Finance, retrieved 12 April 2015.

5. “Factors That Could Trigger Movement In Comcast Stock Price.” Forbes, retrieved 12 April 2015.

6. “FCC Stops Informal Review Clocks.” Bloomberg Business, retrieved 12 April 2015.

7. “Comcast Confident In Time Warner Merger.” Washington Post, retrieved 12 April 2015.

8. “Comcast Said to Plan Web Video Service.” Bloomberg Business, retrieved 12 April 2015.

9. “2014 Year In Review.” Comcast Corporate Website, retrieved 12 April 2015.

10. “Comcast Expands X1 Features.” Multichannel News, retrieved 13 April 2015.

11. “New Comcast IP Set-Top Reaches FCC.” Multichannel News, retrieved 13 April 2015.

12. “Comcast Tacks On More X1 Features.” Multichannel News, retrieved 13 April 2015.

13. “More Schools Connect to ‘XFinity On Campus.'” Multichannel News, retrieved 13 April 2015.

14. “Apple Eyes Fall Pay TV Debut.” Multichannel News, retrieved 13 April 2015.

15. “Comcast Faces Open Season on the Cable Bundle.” Wall Street Journal, retrieved 13 April 2015.

16. X1 Interface Image. Comcast Special, retrieved 13 April 2015.

17. Statement Agreeing on Net Neutrality Rules. Comcast Corporate Website, retrieved 13 April 2015.

18. “FCC’s Faster Broadband Benchmark.” Bloomberg Business, retrieved 13 April 2015.

19. “Comcast, Cable Stock Rises as FCC Won’t Control Rates.” Bloomberg Business, retrieved 13 April 2015.

20. “AT&T Sues to Overturn Net Neutrality Rules.” Wall Street Journal, retrieved 14 April 2015.

21. “Comcast Criticized for Poor Customer Service in Philadelphia.” Bloomberg Business, retrieved 15 April 2015.

22. “Michael Angelakis to Step Down As Comcast Finance Officer.” NYTimes.com, retrieved 15 April 2015.