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A Peek at What's Behind Comcast's Momentum

Mari Silbey
8/19/2015
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Comcast has snagged more than its fair share of headlines over the last several days.

With the failed acquisition of Time Warner Cable Inc. (NYSE: TWC) now in its rear-view mirror, the company has wasted no time investing resources in new projects and gearing up for its continued fight against industry behemoths that range from Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T) to Google (Nasdaq: GOOG) and Facebook .

In the last week alone, Comcast Corp. (Nasdaq: CMCSA, CMCSK) has plunged nearly half a billion dollars into Buzzfeed and Vox Media through its NBC Universal subsidiary. It's announced a new addition to its Video IP Engineering & Research (VIPER) division with the acquisition of This Technology LLC . And word has leaked that a new Comcast online "Watchable" video service is on the horizon, a potential complement to the company's planned skinny-bundle offering called Stream that is also set to debut this year. (See Comcast Scoops Up 'This Technology' and Comcast Readies 'Watchable' Online Service.)

More than most pay-TV and Internet companies, Comcast recognized early on the importance of owning critical media assets and becoming not just a dominant service provider, but a technology leader.

Not everything in the company's playbook has gone according to plan. Think back to Comcast's failed takeover of Walt Disney Co. (NYSE: DIS) in 2004, and its likewise doomed attempt circa 2008/2009 to turn the tru2way/OCAP standard into an operating system for entertainment devices that would bridge the gap between cable and the retail industry. Ouch.

However, Comcast hasn't been one to let failure set it back permanently. Instead, it's continued to place long-term bets and spread its significant wealth around through major media and technology investments.

On the media side, those bets have been obvious. NBC Universal is now the bedrock of Comcast's entertainment business, with further investments in new media companies like Vox and Buzzfeed shoring up its position against current and future online rivals. (See Comcast's NBC Invests $200M in Vox Media and NBCUniversal Invests $200M in BuzzFeed.)


Want to know more about the pay-TV business? Check out our dedicated video services content channel here on Light Reading.


What's less well understood is how Comcast has bulked up on the technology side. The company has invested heavily in building out a national content delivery network. It's pushed fiber so deep into its network that it believes it can offer gigabit broadband to 18 million homes by the end of this year. And, in a major shock to the corporate culture of the company, Comcast has spent the last several years focusing on software development, experimenting with open source technologies and adopting Agile and DevOps workflows. (See Comcast Goes N+0 in Gigabit Markets and Cable Forecast: Cloudy With a Chance of DevOps.)

The cable company has also seeded the rest of the industry with many of its innovations, including the integrated software stack for set-tops known as the Reference Design Kit (RDK) and the X1 video platform. (See Shaw Licenses X1, Proves Comcast's Influence.)

And all of the above doesn't even take into account what Comcast is doing around Ethernet and business services, or its WiFi hotspot network.

If there's one lesson to take away from it all, it may be that Comcast is undaunted. A short four months after its acquisition of TWC collapsed, and the company hasn't slowed down at all. Despite the staid and stuffy reputation of the cable industry, Comcast continues to push the envelope. It makes its own momentum, which begets more momentum, which is turning Comcast into one of the media and technology giants of our time.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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davidhoffman5
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davidhoffman5,
User Rank: Lightning
8/31/2015 | 5:38:26 PM
Comcast.
When they actually deliver consistently significantly better retail residential customer service for longer than a few years, then Comcast might be noteworthy. So far there have been moves to please the merger and acquisition fans, but not much else that actually permanently solves the retail residential customer service problems. Real wireline competition might help create a real focus and expenditure of funds on retail residential customer service improvements that have some significance and permanence. It might be time to start municipal fiber projects in as many Comcast areas as realistically possible to help create that competition.
MikeP688
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MikeP688,
User Rank: Light Sabre
8/30/2015 | 4:50:08 PM
Re: And the hubris to go with it
NBC is a "Platform" as I hope all agree.   I am seeing a profound push to be "online" especially as I am seeing them developing for instance with Shift--which I view as their answer to "HUFFPOST Live".   There is no question that the landscape is changing--but the question is whether the deep analysis needed is out there--and whether folks will come.  Someone used the "Ferrari" analogy. I'd like to use the "Tesla" analogy because we're in a new era--as epitomized by Tesla.

 
msilbey
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msilbey,
User Rank: Blogger
8/20/2015 | 1:25:54 PM
Re: And the hubris to go with it
Yeah, I'm not convinced they want people to sign up for their multi-gig service any time soon, but at least they're putting the infrastructure in place. And yes, I still feel like there's some synapse that isn't connecting on the consumer experience side. Maybe they need to hire more young talent and give them the authority to make changes.
KBode
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KBode,
User Rank: Light Sabre
8/20/2015 | 12:09:03 PM
Re: And the hubris to go with it
"Specifically- the incredible push to get fiber deeper into the network"

I like that too, though it's worth noting I've yet to see a single person successfully sign up for this 2 gig service, despite the fact it was supposed to be available to 18 million by year's end. 

But yes you're right, from pushing DNS security upgrades to pushing DOCSIS 3.1 hard I think you're right, they're excellent on network issues.

As you note customer service is another issue entirely. And while the X1 shows progress it has been very buggy progress, and I'm still not sure they're going to be limber enough to navigate the new era of cord cutting and Internet video effectively. Time will tell.
msilbey
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msilbey,
User Rank: Blogger
8/20/2015 | 9:58:17 AM
Re: And the hubris to go with it
There's a lot I can fault Comcast with, but I have to say I'm impressed with the company's infrastructure evolution. Specifically- the incredible push to get fiber deeper into the network, and the development of both its own private OpenStack cloud, and use of public cloud services for additional redundancy.

On the GUI side, you're right. Comcast still has a lot to prove, but X1 was a pretty big step, and representative of a notable shift toward software-driven, from-the-cloud UI updates.

I find Comcast impressive as a technology company. Now if only it could get a better handle on how to repair its relationship with customers, and develop a better understanding of consumer priorities.
DHagar
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DHagar,
User Rank: Light Sabre
8/19/2015 | 5:59:32 PM
Re: And the hubris to go with it
mendyk, exactly.  That's because these are our historical points of reference, not just investment billboards - without history, you have no meaning.
mendyk
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mendyk,
User Rank: Light Sabre
8/19/2015 | 5:56:15 PM
Re: And the hubris to go with it
There are still those of us who insist that Radio City Hall is on Sixth Avenue, even though the street signs have said Avenue of the Americas for decades.
DHagar
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DHagar,
User Rank: Light Sabre
8/19/2015 | 5:49:00 PM
Re: And the hubris to go with it
KBode, see, I see it the same way - with both Comcast and Verizon.    They are in an entirely new ballgame now.

If you buy a Ferrarri, but don't know how to drive it, what value will you get?
KBode
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KBode,
User Rank: Light Sabre
8/19/2015 | 5:26:14 PM
Re: And the hubris to go with it
"What internal "expertise" have they built to effectively design and manage all these acquisitions and build into a cohesive business platform?  Or is this the "Peter Principle" played out again?"

The hope, like Verizon, is to acquire content companies that will let them do battle on the ad front with Facebook and Google. But Facebook and Google understand that market, are capable of innovating and disrupting, and understand consumer-friendly GUIs -- none of these are things companies like Verizon and Comcast are particularly good at.

Yeah, the NBC ownership gives them media experience, but not necessarily for the new era we're entering.
DHagar
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DHagar,
User Rank: Light Sabre
8/19/2015 | 5:07:45 PM
Re: And the hubris to go with it
mendyk, you are a good advocate for him and Comcast.  I have no animosity towards them, if they deliver and are successful they will earn that recognition, if not it will be hubris.  I am thinking they might want to deliver first - but we will watch and see.

Note:  Thanks for historical review of names.  You are probably right that people will still refer to the name they know.
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