2 Comments

Summary:

By Sramana Mitra Comcast Corporation is the largest cable operator in the United States and one of the leading communications and entertainment companies in the world focusing on broadband communications and content. In this segment, we will evaluate how Comcast is leveraging the evolving convergence phenomenon […]

By Sramana Mitra

Comcast Corporation is the largest cable operator in the United States and one of the leading communications and entertainment companies in the world focusing on broadband communications and content. In this segment, we will evaluate how Comcast is leveraging the evolving convergence phenomenon in its growth strategy.

Comcast’s operations can be broadly categorized into three segments:

The cable operations of Comcast served approximately 24.2 million video subscribers, 11.5 million Internet subscribers and 2.5 million phone subscribers. The Company’s networks covered 39 states in the US and approximately 45.7 million homes in 2006. Comcast’s average cash flow per subscriber is $435.

Comcast is focusing on Cable, Internet and VoIP to grow its business. Digital Broadband is the key and the Company is betting big on its Triple Play (Cable, Phone, Internet) service. Comcast has been talking about the potential of Triple Play for the whole of 2006. Triple Play provides subscribers with cable, high-speed Internet and phone services in one convenient package for $99 per month.

In 2006 Comcast increased its RGU (Revenue Generating Unit) additions by 69% to 5 million users from 3 million users in 2005. The Company is bullish about RGU additions and hopes to grow RGU additions by 30% to 6.5 million in 2007 on the wings of Triple Play.

The Company is also acquiring other Cable operators and rebalancing its portfolio (Patriot Media, Adelphia Communications, division of Insight) in the US to consolidate its position in the market. It recently invested in San Mateo-based Vyatta, an opensource router company, indicating it has as yet undisclosed designs.

Comcast has taken the lead to grow the VoIP industry rapidly. Comcast’s VoIP subscriber base is growing faster than the industry and the Company is expected to be the largest VoIP provider in the US by mid 2007. Comcast added over 500,000 VoIP subscribers in the last quarter of 2006 and surpassed 2 million subscribers in February 2007.

Comcast formed Comcast Interactive Media (CIM) to grow its online media business. CIM manages Comcast.net, portal for high-speed Internet subscribers, thePlatform, a company that provides technology to manage digital content, and other new online businesses in development. CIM is focused on developing interactive services that offer video, entertainment and information to consumers across multiple platforms.

Being a cable company, Comcast’s CIM venture is too little too late. However, Ziddio, a online and on demand channel for the entertainment enthusiast and GameInvasion, a online gaming site, with cutting-edge games and video-rich interface are good verticals to start with as they are hot properties on the Internet and attract significant eyeballs. TV Planner is also an interesting offering.

Ziddio recently entered into a partnership with Facebook to create and share user-generated videos and become part of a new television series titled “Facebook Diaries.” This partnership will aid in increasing the quantum of video and traffic to Ziddio. The selected videos will also be available on Comcast’s on demand service. Comcast will sell advertising for the video inventory and in the process, hopes to maximize its revenues.

Comcast has also launched FEARnet, a new advertising-supported, multiplatform network delivering the best of modern horror films, streaming video and original content – on demand, online and to mobile devices.

Comcast has delivered 26 straight quarters of double digit cable cash flow growth and with its Triple Play and Interactive ventures taking shape, 2007 could be a strong year.

Sramana Mitra has been the founder CEO of 3 startups, Interim VP of Marketing of 7 startups, and has consulted for over 70 companies including public companies such as SAP, Cadence, Webex, and others. This post first appeared on her blog, Sramana Mitra on Strategy, and has been syndicated with the consent and permission of the author. 

You’re subscribed! If you like, you can update your settings

  1. AT&T is going to get into triple play very soon in California as they got the approval to provide video services.

    This news may not be a good for Comcast’s future growth in California.

  2. Convergence into a purely IP driven system would make sense – all 3 service – internet, phone (VoIP), and TV (IPTV) all through one line.

    Eventually I suspect they will phase out the Cable part altogether.

Comments have been disabled for this post