PHILADELPHIA — Acknowledging the twin threat of satellite and telco to its core businesses, giant cabler Comcast insisted Wednesday that it will deliver better video, high-speed Internet and phone service than rivals.
With cable stocks in the tank and Comcast bruised by its failed run for Disney, a stream of execs, including chairman-CEO Brian Roberts and his No. 2 Steve Burke, looked to burnish the company’s rep at its first Media Day at Comcast headquarters in Philadelphia.
Roberts said Comcast has “moved on” from the Disney bid. The cabler, which will spend about $4.5 billion on content this year, will be content for now to view showbiz companies as partners, not acquisition targets. “We like our business,” Roberts said.
“Plus, they wouldn’t talk to us,” quipped Burke.
No hostile desire
Burke said outside the meeting that Comcast had never envisioned a hostile bid for Disney and would not have made its offer last February without some indication from the Disney board, particularly Mouse’s current chairman, George Mitchell, that the bid could be well-received. Mitchell has denied that he encouraged Comcast’s bid.
Comcast isn’t looking at MGM. But as expected, it is likely to make a run for Adelphia Communications, he said.
Mostly, the nation’s largest cabler — with 21.5 million subscribers — is focused on keeping its customers happy and adding new ones by rolling out a host of products and services over the next few years, and doing it faster and better than rivals like DirecTV, or SBC.
With a barrage of news reports in recent months on the incursion of regional Bells and satellite services onto cable turf, “You get the impression that our company and industry is under competitive assault,” Burke said. But “competition does not tend to destroy an industry,” he added.
DSL has been rapidly adding high-speed Internet subs, phone companies are now trying to add video, and phone and satellite companies are partnering to combine the services. The race is to offer a bundle of video, high-speed ‘Net and telephony over one pipe, if possible.
Roberts noted that because cable has already spent billions ($85 billion since 1995) to upgrade its lines, Comcast can spend much less to take on the telcos than vice versa. “For us to sell a Verizon customer phone service costs us under $300. For Verizon to offer fiber to the home costs them many thousands.”
And while satellite services are adding subs faster than cable, he said the quality of customer, in terms of new services they adopt and how much they pay per month, is as important, or more so, than the quantity. He said DirecTV and EchoStar have been spending huge bucks for marketing and promotion, while cable hasn’t.
Execs talked lots about high-definition, video-on-demand and personal video recorders. “TV will change more in the next five years than it has in the last 50,” said Burke. “We’re moving to the next stage. Choice. Getting TV programming you want, when you want it … We should embrace the changes. It’s the future. There’s no way you can change the future.”
Burke said he went to see former Viacom chief operating officer Mel Karmazin about 18 months ago to ask about putting Viacom programming — MTV, maybe CBS News — on demand. He said Karmazin told him, “‘I want to close my eyes and put my head on my desk, and when I look up, you will be out of my office.”
To keep customers and lure new ones, Comcast is offering, or will offer, a range of services, many available on other platforms or with other operators, some not. They include video e-mail, video telephones, photo shows using pictures from a sub’s digital camera, and an admittedly cool tool to navigate channels by genre. Click sports, for instance, and you’ll get six to eight small screens broadcasting all the sports that’s on TV at that moment.
Most of the services are available only to digital subs, which make up only about a third of the company’s total base.
Digital customers will be able to stream music from their TV and PC simultaneously, get caller ID flashed onto their TV screens, read about Comcast’s latest VOD offering online and stream music from a PC and TV simultaneously. The company even promised “CD” voice quality when its telephone service rolls out.
Company is trolling for new content to fill VOD.
David Cohen, who heads Comcast’s government affairs, said the cabler has offered to set up interviews of three to seven minutes with the two presidential candidates. “We’d pose a few questions and they’d get to respond and we’d put a bar in On Demand so they get a chance to talk to the public in more than 30-second sound bites,” Cohen said.