categories

HOT TOPICS

Subscribe to our Feed

Web 3.0 & Comcast (Part 1)

Posted on Monday, Oct 22nd 2007

Introduction

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

* Cable which includes cable systems, video, regional sports and news networks, Internet and phone services, and Programming. It operates and manages popular television channels including The Golf Channel, VERSUS, E!, Style Network, G4 and AZN Television.

* Comcast Spectacor that owns and manages the Philadelphia 76ers, the Philadelphia Flyers and two large multipurpose arenas in Philadelphia.

* Comcast Interactive Media develops and operates Comcast’s Internet businesses.

Comcast registered a record performance for the quarter ended June 30, 2007. Revenues increased 31% to $7.7 billion for the second quarter of 2007 reflecting continued strong
consumer demand for Comcast’s services and the success of the Comcast Triple Play. Net Income for the quarter increased 28% to $588 million or $0.19/Share over the three months ended June 30, 2006. Fiscal year to date, net income increased 54% to $1.4 billion or 45 cents per share.

Comcast recorded double-digit growth in cable revenue, its 28th consecutive quarter of double-digit OCF growth and fourth consecutive quarter of record-breaking RGU additions. Revenue generating unit (RGU) additions increased 94% to a second quarter record of 1.6 million in 2007 from the 830,000 RGUs added in the second quarter of 2006. The Company ended the quarter with 54.2 million RGUs, an increase of 6.5 million units from one year ago. Year to date through June 30, 2007, Comcast added 3.4 million RGUs, a 77% increase from the same period last year.

The Company added 823,000 new digital cable subscribers in the second quarter of 2007 – the highest level of quarterly digital additions in Company history. Comcast ended the quarter with more than 14 million or 59% of video subscribers taking digital services – an increase from 48% digital penetration one year ago. It also installed a record 2.1 million digital set-top boxes in the second quarter of 2007 – roughly equal to that deployed in the previous six months combined.

The Company added more than 671,000 Comcast Digital Voice (CDV) customers and, in just 2 years, have surpassed 3 million digital voice customers. The CDV service is now marketed to 38 million homes representing 79% of Comcast’s footprint. The Company added 330,000 high-speed Internet subscribers during the second quarter – penetration now exceeds 26%.

Comcast improved its Monthly Average Total Revenue per Basic Subscriber from $90.76 in 2Q06 to $101.02 in 2Q07 in its video segment. Monthly Average Revenue per Subscriber for High Speed Internet was $43.37 in 2Q07 up from $43.06 in 2Q06. Monthly Average Total Phone Revenue per Subscriber was down to $42.92 in 2Q07 from $45.24 in 2Q06.

Though, the Company is focused on the cable segment, it is making efforts to leverage its digital portfolio. Comcast Interactive Media operates a number of entertainment sites. Comcast.net boasts more than 2.5 billion page views, 80 million videos views and 15 million unique visitors a month. Comcast has made a few acquisitions in the online space and entered into various agreements for online advertising that should enable it to grow revenues substantially.

The Company is believed to be in talks with other online companies to either acquire them or partner with them. In April 2007, Comcast acquired online movie ticket destination Fandango for $200 million. Fandango is a fast growing site with about 5 million unique monthly visitors. In April, the Company entered into an online advertising contract with Yahoo under which Yahoo gains exclusive ad placement rights to Comcast.net.

Comcast delivered a pretty strong performance in 2Q07. It has been focusing on building its Triple Play (Cable, Phone and Internet) service. Triple Play is expected to deliver more value to the consumers and higher total revenue per subscriber to the Company.

The Company is also focusing on Business Services and Interactive Advertising to grow revenues. The Company has delivered 28 straight quarters of double digit cable cash flow growth and with its Triple Play and Interactive ventures taking shape, 2007 seems to be a very strong year of growth for Comcast. We will take a closer look at Comcast’s Internet properties in the following posts.

(To Be Continued)

This segment is part 1 in the series : Web 3.0 & Comcast
1 2 3 4 5

Hacker News
() Comments

Featured Videos

Comments

This is from a personal experience (I am a customer of triple play)I see no big differentiators in Comcast’s offerings vis-a-vis its competitors

Comcast is getting beaten in cable by likes of direct TV who offer more incentives and also have better coverage of key events, NFL, pay-per-view etc

Comcast Internet is fast but not sure how many Internet consumer need blazing speeds when their DSL can fulfill their basic need and is cheaper. This may change going forward as the media content get pushed to internet as part of Web 2.0 and 3.0. A service like Slingbox may benefit from higher broadband speeds.

Comcast phone is good (Free calls to US, Canada, PR). Quality is not bad. But again as a standalone service, its pricier at around 39 bucks.

What Comcast is missing ? I think they need to broaden their range of offerings

Phone service can be split into multiple plans with a local only plan to plans with International calling features
Cable offering also need to broaden. I don’t see them offering many international channels as well as many sporting events. I would love a future when cable become personalized instead of a one big pricey package nowadays.
Same with Internet. There are customer who have basic needs and may not need the blazing speed. They don’t need to shell out big bucks if they use just Comcast internet.

Triple play is good but personalized packages are even better

Balaji Monday, January 7, 2008 at 5:28 PM PT

Balaji,

Telecom, at a very generalized level, is a pricing and promotions game. I don’t agree with your comments above. Telephony would be the wrong place to focus for Comcast, except as part of Triple Play. But if they leave customers who have 2 of the 3, and not telephony out, that would be leaving money on the table.

In terms of DSL / Cable being blazing fast … it is not only going to important, it will be key. Online Video is a very big trend.

Sramana

Sramana Mitra Monday, January 7, 2008 at 8:31 PM PT

I guess my point was Comcast need to broaden the offerings even within the realm of triple play

Telephony, though a commodity, can still be a revenue generator. Comcast telephony is VOIP (to best of my knowledge !!) and since cost of installing cables are sunk costs, Comcast can still get away with lower price points. The idea is to penetrate a household and get them used to Comcast service

Back to my original point. I still think Triple play has limited choices. How about offering customer multiple options in Cable, Telephone and Internet to choose from, still being offered as a package ?

Balaji Tuesday, January 8, 2008 at 1:26 AM PT